SaaS (software as a service)
Also called software as a service.
Software you use over the internet, usually by subscription, while the provider runs the application and everything under it.
Last updated
What it is.
NIST SP 800-145 defines SaaS as using the provider's applications running on cloud infrastructure, reached through a web browser or an API. You do not manage the servers, storage or even the application's code, only some user settings.
SaaS is also a business model. A company that builds a product and sells it as a subscription is a SaaS company. Under the hood it often runs on PaaS or rented infrastructure.
Why it matters
Buying SaaS is fast and needs no engineering team, which makes it the right choice for most non-core work. The limits are what the product lets you change, what happens to your data, price rises as you grow, and vendor lock-in. Comparing SaaS with a custom build is a total cost of ownership question.
In a product build
Many product builds are SaaS products themselves, and nearly all of them connect to other SaaS tools. Choosing which parts to buy and which to build is usually settled in discovery.
Common mistakes.
- 01
Comparing the first year's subscription with the full cost of a build.
- 02
Not checking how to export your data if you leave.
- 03
Building custom software for a problem that a mature SaaS product already solves well.
Read the official text.
Primary sources this definition is based on.
- NIST SP 800-145, The NIST Definition of Cloud Computingchecked 2026-10-25
Work it out with a tool.
Related terms.
- PaaS (platform as a service)Cloud hosting where you deploy your own application and the provider runs the servers, operating system and runtime underneath.
- Vendor lock-inWhen leaving a supplier, platform or tool would cost so much time or money that you are effectively stuck with it.
- Total cost of ownership (TCO)Everything a piece of software costs over its life, not just the price to build or buy it.
- SLA (service level agreement)A contract that promises a level of service, such as uptime or support response time, and says what happens if it is missed.
