What Distinguishes SaaS From Regular Software Applications?


Discover the future of work with SaaS - unlock the power of accessibility, mobility, and cost-effectiveness. Learn how to revolutionize your business and embrace a flexible, productive, and hassle-free work environment. Don't miss out on the incredible benefits that await you in the world of SaaS!

Brace yourself for mind-blowing growth in the software as a service (SaaS) market, as predicted by top industry analysts at McKinsey & Company.

A massive shift is underway towards cloud-based software as businesses move from on-premise installations to SaaS offerings.

With forecasts pointing towards a staggering $200 billion market by 2024, you’ll likely experience the incredible rise of SaaS products, changing the productivity game for businesses and consumers.

As companies fully embrace the potential of SaaS, it becomes crucial to acknowledge the driving forces behind this significant shift.

With cloud-based solutions’ convenience, businesses benefit from increased scalability, streamlined processes, and cost-effectiveness, from project management to customer relationship management.

Remembering the 2000s

Ah, do you remember the good old days of installing software from a CD and downloading the updates to combat the latest vulnerabilities or to acquire the latest functionality?


It was an experience full of indifference and annoyance, especially if the installation crashed, for you to restart the whole process.

Now, thanks to the wonders of technology, those days are long gone. With the advent of cloud computing and high-speed internet connectivity, software installation has become a breeze.

We no longer have to fuss with CDs or worry about compatibility issues. All we require is a fast, stable internet connection, and within a few clicks, we can have the latest software up and running.

But wait, I hear you ask. Is there still a requirement to download anything anymore? Oh, you’re thinking of Software as a Service (SaaS).

SaaS: What Has It Done for You Lately?

Firstly, it has eliminated the need for physical media, reducing waste and contributing to a more environmentally friendly approach, acknowledging those Environmental, Social, and Governance (ESG) management responsibilities.

With SaaS, gone are the days of manually downloading and installing patches; now, updates are seamlessly integrated into the application directly, ensuring end users have access to the latest features, benefits, and security enhancements.

Additionally, SaaS offers greater flexibility and accessibility. With traditional software applications, depending on your licensing type, you were limited to using it on a specific device or operating system. But with a SaaS solution, you can access your applications and data from any device with an internet connection. This means you can work on your projects from your desktop, laptop, tablet, or smartphone, providing your business and workforce unparalleled convenience and freedom.

This convenience and freedom are made possible because of the five characteristics of cloud services, all managed by the cloud service provider and application vendor relationship.

Now we’ve covered the basic concept of SaaS and how it operates on the cloud delivery model, let’s delve into the inner workings of this innovative approach.

The Inner Workings of SaaS

Software as a Service operates on the cloud delivery model, allowing users to access applications and data remotely. In this model, a software provider is responsible for hosting the application and its associated databases, networking, and computing resources. Alternatively, an Independent Software Vendor (ISV) may partner with a cloud service provider (CSP) to host the application in their data center.

Regardless of the hosting arrangement, the cloud-based nature of SaaS ensures users can seamlessly access their applications and data from anywhere, anytime, and from any device.

Exploring the Incredible Benefits of SaaS

SaaS offers several benefits advantageous for businesses and individuals alike.

Key benefits:

  • Cost-effective: SaaS eliminates the need for upfront hardware and software license investments. Users can access applications via a subscription model, paying for their services. This cost-effective approach allows businesses to save money on infrastructure and maintenance costs.
  • Scalability: SaaS applications are designed to be scalable. As your business grows, you can upgrade or downgrade your subscription to match your dynamic requirements. This flexibility enables companies to adapt quickly to market demands without worrying about hardware limitations or software compatibility issues.
  • Accessibility and mobility: Broad network access allows users to work remotely, collaborate with team members in different locations, and access data on the go. It enhances productivity and encourages a flexible work environment.
  • Easy updates and maintenance: The CSP or ISV handles software updates and maintenance. This eliminates the end users’ need to install updates or worry about system compatibility.

But how did this innovation get started and gain widespread popularity?

The SaaS Effect

Software as a Service emerged as a new way to deliver software in the early 2000s. However, the concept and groundwork for this model had been in the works for some time. Salesforce, a cloud-based CRM platform, brought SaaS into the limelight and pioneered this innovative approach in 1999. Thanks to Salesforce’s success, other companies quickly followed suit, offering their software applications as online services.

Here are a few SaaS-based services you might have heard about:

  • Monday.com: A work operating system with robust features for project management.
  • DocuSign: A secure and reliable SaaS application for electronic signature and document management.
  • Salesforce: A cloud-based software company providing customer relationship management (CRM) services.
  • Zoom: A video conferencing platform.
  • Google Applications (G Suite): Cloud-based productivity and collaboration tools.
  • Spotify: A music streaming site.
  • Microsoft Office Suite: A cloud suite that offers document production and sharing.

The SaaS Revolution

Software distribution has undergone a revolutionary transformation with the rise of SaaS applications. Gone are the days of relying on physical stores or distributors to access software products. The SaaS revolution has paved the way for easy, hassle-free access to software applications as soon as they hit the market. This revolution has not only changed software distribution but has completely transformed the business model for software companies. Customers are no longer required to invest in multiple licenses for a one-time purchase. Instead, software companies have embraced the subscription-based model, thanks to the game-changing impact of SaaS.

The Transformative Power of Subscriptions

The subscription-based model offers several advantages for software companies and their customers. For software companies, it provides a more predictable and stable revenue stream. Instead of relying on one-time purchases, they can generate recurring revenue from monthly or annual subscriptions. This allows them to invest in continuous development and improvement of their software, ensuring customers always have access to the latest features and updates.

Retail customers have access to the subscription-based model as well. Instead of making a significant upfront investment, they can now pay for software regularly, making it more affordable and accessible for individuals. This means customers can quickly try out different software applications without worrying about being locked into a service that doesn’t meet their requirements. There’s also the occasional possibility of a one-off payment for perpetual membership.

From Startups to Global Corporations and Everyone in Between

Now we’ve explored the versatility of Software as a Service, let’s dive into the specific users who benefit from this innovative technology. From startups seeking cost-effective solutions to global corporations requiring scalable platforms, SaaS has become the go-to choice for businesses of all sizes. Whether you are an entrepreneur looking to streamline your operations or a multinational company aiming to enhance collaboration, SaaS offers a range of features and benefits catering to your unique requirements. Let’s look at how different users utilize SaaS to drive success.

Startups often have limited budgets and resources, making SaaS an attractive option. Using Software as a Service, startups can access various applications without expensive infrastructure or in-house IT teams. They can choose from multiple solutions to meet their business needs, such as secure email systems, customer relationship management (CRM) software, project management tools, and accounting systems. SaaS allows startups to scale their operations quickly and easily, as they can add or remove users or features as their business grows.

Small and Medium-sized Enterprises (SMEs) can benefit from SaaS similarly to startups. They can leverage software applications to streamline business processes, improve efficiency, and reduce costs. SaaS solutions enable SMEs to access enterprise-grade software at affordable prices, allowing them to compete with larger organizations. Additionally, SaaS offers flexibility, as SMEs can integrate and customize different applications to fit their unique requirements.

Global corporations have complex operations spread across multiple locations. SaaS provides them with a centralized platform to manage their various business functions. Large enterprises can utilize SaaS for enterprise resource planning (ERP), human resources management, supply chain management, and other critical processes.

The Bottom Line

SaaS’s cost-effective nature allows businesses to save money on infrastructure and maintenance costs, making it an attractive option for companies of all sizes. The scalability of SaaS applications ensures businesses can quickly adapt to their changing circumstances as they grow and expand.

The accessibility and mobility offered by SaaS enable employees to work remotely and collaborate with colleagues from anywhere, enhancing productivity and promoting a flexible work environment.

Additionally, the easy updates and maintenance provided by the cloud service provider eliminate the hassle of managing software updates and system compatibility. With all these benefits, it is clear the best is yet to come for SaaS.

As technology evolves, we can expect even more innovative advancements in the SaaS industry, further enhancing its impact on businesses and individuals. So, embrace the power of SaaS and prepare for a future where convenience, efficiency, and cost-effectiveness reign supreme.


Related Reading

Related Terms

John Meah
Cybersecurity Expert

John is a skilled freelance writer who combines his writing talent with his cybersecurity expertise. He holds an equivalent level 7 master's degree in cybersecurity and a number of prestigious industry certifications, such as PCIP, CISSP, MCIIS, and CCSK. He has spent over two decades working in IT and information security within the finance and logistics business sectors. This experience has given John a profound understanding of cybersecurity practices, making his tech coverage on Techopedia particularly insightful and valuable. He has honed his writing skills through courses from renowned institutions like the Guardian and Writers Bureau UK.