A-Z Popular Blog Software Search »
Related Topics
Information Technology

What is Software as a Service?

 , updated on
Software as a service, or SaaS, is software that is hosted, managed, operated and supported by a vendor.

SaaS vs Software

Traditionally, customers purchased software and installed it on their own equipment. Under this model, the customer needs to make an upfront investment. The software vendor may offer support but management and operation of the software lies with the customer. SaaS is often billed on a monthly basis with no upfront fees and typically includes hosting, operation and management.

Saas vs PaaS

Platform as a service, or PaaS, is a model where a vendor provides a rich environment for developing your own software. The PaaS environment is managed, operated and supported by the vendor. SaaS is oriented towards software that works without any development, PaaS is for developing software yourself.

SaaS vs IaaS

Infrastructure as a service, or IaaS, is the rental of cloud computing infrastructure such as computing, data storage and load balancers. The vendor manages and operates related data centers and may provide a platform for managing your computing infrastructure. SaaS is managed software, IaaS is managed hardware. In other words, IaaS doesn't include any software beyond basic operating systems and tools for managing cloud infrastructure.

SaaS vs Cloud Computing

Cloud computing is a class of information technology that allows many physical computers to act as a single resource. SaaS is typically implemented using cloud computing. As such, it is reasonably accurate to say that SaaS is a type of cloud computing.

SaaS vs Mobile Apps

Mobile apps require users to install software on their devices. As such, mobile apps aren't SaaS. However, in many cases an app heavily relies on cloud services for its functionality. In this case, the mobile app can be viewed as a thin client for software as a service.

SaaS vs Websites

Websites are hosted by the provider and resemble SaaS. Any website that implements enough functionality to be considered software is SaaS. For example, a website that allows users to upload and download their data and documents is considered software as a service.

Service Level Agreement

Software as a service usually comes with a service level agreement, or SLA, that provides a contractual guarantee for the performance of the service. For example, it is common for an SLA to promise an uptime of around 99.95% with penalties for missing this target.


Software as a service allows a firm to start using software quickly with little upfront investment. Payments for SaaS are typically an operating expense that can be immediately deducted for the purposes of taxation. SaaS software is managed, operated and supported. This generally makes life easier for the customer. Many SaaS vendors have an established reputation in areas such as reliability and security. Some SaaS products allow customers to liberate and encrypt their own data. SaaS can typically be customized by the customer to add functionality or integrate systems and data.


SaaS is typically priced as a monthly recurring fee and may have a higher total cost of ownership than the traditional model of purchasing software with one upfront payment. Customers have no control over the software and it may be upgraded and changed regularly. Customization of the software can be costly and upgrades can require custom code to be updated according to the vendor's schedule. Sophisticated customers may find that some SaaS vendors lag in areas such as information security and service management. It can be difficult to end contracts with SaaS vendors as they have your data. If a SaaS vendor fails, your business may be disrupted.
Overview: Software as a Service Definition
Software that is hosted, managed, operated and supported by a vendor.
Related Concepts

Computing Basics

This is the complete list of articles we have written about computing basics.
Computer Examples
Computer Program
Data Processing
Runtime Error
System Program
If you enjoyed this page, please consider bookmarking Simplicable.


An extensive guide to common software terms.

Types Of Software

The common types of software.

Software vs Data

The difference between software and data.

Consumer Software

A definition of consumer software with examples.

Infrastructure Software

The definition of infrastructure software with common examples.

Software vs Hardware

The difference between software and hardware with examples.

Computer Program

The definition of computer program with examples.

System Program

The definition of system program with examples.

Information Systems

A list of common types of information system.

Cloud Computing

A list of cloud computing terms.

Cloud Computing Definition

Common definitions of cloud computing.

Types Of Cloud

The basic types of cloud computing.

Workload Automation

A definition of workload automation with examples.

Managed Services

The common types of managed service.

Types of IT Service

The definition of information technology service with examples.

Infrastructure as a Service

Common examples of infrastructure as a service.

IaaS Definition

The definition of infrastructure as a service with comparisons.

Cloud Scaling

The definition of cloud scaling with examples.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map