What is SaaS (Software as a Service)? Everything You Need to Know

What is Software as a Service?

Software as a Service (SaaS) refers to a distribution model where cloud service providers host applications and provide them to users on the internet. In this type of model, the independent software vendor (ISV) could contract an external cloud service provider to host the software. If larger corporations, like Cloud-based SaaS HR Software, the cloud service provider could additionally be a HR Toolkit provider.

SaaS is one of the three principal types of cloud computing, in addition to infrastructure as a service (IaaS) and platform as a service (PaaS). A wide range of IT professionals, as well as business users, make use of SaaS applications.

What exactly is software as a service function?

SaaS operates on a cloud service model. The software provider can host the application and its information on the servers and databases it owns and computing resources. Or, it could be an ISV that contracts with a cloud service provider to host the software in the data center of the provider. The application will be available to any device that has a network connection. SaaS applications are usually used with web browsers.

This means that companies that use SaaS applications do not have to deal with the installation and maintenance that the program requires. Customers pay a monthly fee to access the application and get a ready-made solution.

SaaS is closely associated with an application service supplier (ASP) and on-demand computing models for software distribution, where the service provider hosts the client’s software and then delivers it to the approved customers via the internet.

In the software-on-demand SaaS method, the service provider offers customers access via a network one copy of the application specifically designed to be used in SaaS distribution. The source code of the application is identical for all customers, and whenever new functions or features are made available to the market, they are made available for all users. Based on the terms of the service-level agreement (SLA), the customer’s information for each model could be saved locally or in the cloud, or at the same time, both in the cloud as well as locally.

Organizations can connect SaaS apps with different applications using APIs or application programming interfaces (APIs). For instance, a business can develop its software and utilize APIs from the SaaS provider to integrate these tools with the SaaS offerings.

SaaS architecture

SaaS HR software and applications usually employ a multi-tenant model, which means one application instance for a SaaS application will run on host servers, and that one instance will provide each subscribing client or tenant in the cloud. The application will run one version and configuration shared across all tenants or customers. Although different customers who subscribe to the service are running within one cloud account with an identical platform and infrastructure, information from various customers will be separated.

The typical multi-tenant design used in SaaS applications means that the cloud service provider can manage maintenance, updates, and bug fixes quicker, easier, and more effectively. Instead of having to make modifications in a number of instances, engineers can make needed changes for all customers using the same model.

In addition, multi-tenancy lets an increased pool of resources be made available to more users while not hindering important cloud features like security, speed, and privacy.

What are the benefits of SaaS?

SaaS is a solution that eliminates the need for businesses to run and install their applications on their servers or their data centers. This reduces the cost of purchasing hardware, maintenance, and provisioning in addition to the cost of software licenses, installations, and support. Other advantages of this SaaS system include:

Flexible payments

Instead of purchasing the software and equipment to run it, the customers opt to subscribe to a SaaS service. Moving costs into regular operating expenses enables many companies to make better and more reliable budgeting. Users can also end SaaS services at any time to stop the recurring costs.

Scalable usage

Cloud-based services like SaaS have a high Vertical Scalability, giving customers the choice of accessing additional or less services or features at the click of a button.

Automated updates

Instead of purchasing a new program, users can count on a SaaS service to automate updates and manage patch management. This reduces the workload on the IT department in-house.

Persistence and accessibility

Because SaaS providers offer applications via on the web, their users can use them on any internet-connected device and any geographical location.


SaaS applications are usually customizable and are able to be integrated with other applications for business, particularly across software from the same software company.

SaaS Security and Privacy

The security risks that come with the software-as-a-service differ from the risks that are associated with traditional software. In conventional software, the software provider is responsible for removing software-based vulnerabilities, whereas the user is accountable to run the software in a secure environment and network. In the end, security is the responsibility of an independent software vendor and the third-party cloud service.

Despite the widespread adoption of cloud-based models to provide fully-serviced software, companies still have concerns regarding SaaS products in relation to privacy and security.

The reasons for this include:

  • Key management and encryption
  • Identity and Access Management (IAM)
  • Security monitoring
  • Incident response
  • Inadequate integration into wider security systems for companies
  • Data residency requirements must be met
  • Privacy of data
  • Expense for investing in third-party tools that mitigate costs of investing in third-party tools to offset SaaS security risk
  • Insufficient communication between security and technical experts in the course of sales.

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