What is SaaS?

Think of it like Netflix for software.

Instead of buying a DVD (installing software on your computer), you pay a monthly fee to stream movies (access software through your browser).

Real examples you probably use:

• Spotify - Music streaming instead of buying CDs
• Google Docs - Document editing instead of buying Microsoft Office
• Slack - Team communication instead of installing chat software
• Dropbox - Cloud storage instead of external hard drives

If you've ever logged into a website to use a tool (instead of downloading and installing it), you've used SaaS.

How SaaS Works

With traditional software, you buy a license, download it, install it on your computer, and it lives there. You own it, but you're also responsible for updates, security, and backups.

With SaaS, the software lives on the provider's servers (in "the cloud"). You access it through your web browser. The provider handles all the technical stuff: updates, security, backups, and making sure it works.

The SaaS Business Model

SaaS companies typically charge in one of these ways:

• Monthly subscription (e.g., $10/month)
• Annual subscription (e.g., $100/year, usually with a discount)
• Per-user pricing (e.g., $15/user/month)
• Tiered pricing (basic, pro, enterprise levels)

Key Characteristics

1. Accessible anywhere - Works on any device with internet
2. Always up-to-date - Provider handles updates automatically
3. Scalable - Easy to add or remove users
4. Lower upfront cost - Pay as you go instead of large one-time purchase
5. Data stored in the cloud - Accessible from anywhere, but you're trusting the provider