Software as a Service, more commonly known as SaaS, is a software delivery model. It uses an internet connection and web browser to allow users to access its data from anywhere. SaaS applications are also known as Web-based software, on-demand software and hosted software. The SaaS is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS).

While executives and managers tend to have favorites for things like business intelligence software, human resources, communications, etc. staff at all levels benefit from SaaS tools. They include time tracking, marketing, sales, and ecommerce software, CRM and POS software, website builders, and collaboration management.

What is the history of SaaS?

In a 1961 speech to MIT students, John McCarthy, a renowned computer scientist that won the Turing award for his work in artificial intelligence (AI), famously said, “Computation may someday be organized as a public utility.” In other words, the concept of cloud computing began as a shared resource of computing power.

While the idea has been around for some time, the web-based technology required to support SaaS matured in the late 1990s. That’s when companies such as Salesforce—which was founded specifically to create cloud software—began offering traditional enterprise solutions, such as customer relationship management (CRM), through a SaaS model.

At first, the enterprise software world didn’t take SaaS seriously. But the past decade has shown rapid SaaS growth and adoption.

Did you know?

Recent research finds that:

  • By 2021, 73% of organizations will be using all or mostly SaaS solutions.
  • Nearly 85% of small companies have already invested in SaaS options.
  • Organizations with 250+ employees use more than 100 SaaS apps.
  • Small firms of up to 50 employees use between 25-50 SaaS solutions, on average.
  • 30% of SaaS companies reported their churn rates have increased in the past year.

FAQs about Software as a Service

Yet many of business leaders still have questions about SaaS. They want to know why it could be a good choice for their company. Based on those conversations, here are the top frequently asked questions about SaaS.

1) What Happens to My SaaS Online Business System When I Lose My Internet Connection?

One question that potential customers always ask is “what happens if I lose my internet connection?

The primary downside of SaaS is that it relies on a good internet connection. But unless your business resides in a remote location, your connection will be more than sufficient to utilize today’s SaaS systems.

As a safeguard, some SaaS vendors have developed “offline” functionality that allows people to keep working in the event that the internet does go down. Once a connection is available again, all the data is synced to the system.

2) What are the biggest advantages of SaaS?

There are many advantages of SaaS –Here are some of them:

  • SaaS excludes the need to download and maintain data on your own systems. This means that whether it is a laptop or your organization’s servers
  • Subscription-based payments are easy, flexible and affordable. With this model you can discontinue the service and avoid paying for it; and start again whenever you need it.
  • You can get access to the services within your budget and your requirements. The verticality of SaaS allows people to opt only for the features they really need.
  • Global access is another plus. You can access a SaaS tool anywhere from the world.

3) Who owns my valuable data?

The most expensive commodity today is data – everyone needs it, from governments to marketers, to hackers – simply everyone.

Part of doing due diligence on a vendor, you should check the SLA and make sure that there is a clause that gives you uninterruptible and unchallengeable right and entitlement to your data.

Most of the SaaS companies know how sensitive data is and how concerned businesses are about this topic – so they already have this clause.

In the worst-case scenario, you lose your data only when there is a hacking attempt on a SaaS companies’ servers. Otherwise, they can’t use your data for any commercial or personal use whatsoever.

4) Can I customize SaaS?

Thanks to the evolution of SaaS, today, in the vast majority of cases, the answer to this question is yes.

It is becoming much easier and more common to customize SaaS systems to assume the identity of the contracting company.

5) What if my SaaS provider goes out of business?

These companies are very professional with your data and services. They either let you know in advance or in case of a buyout. They let the data center hosting companies keep it up and running until you export the data to a new vendor. An SLA should be there to ensure both – a decent time period for you to prepare for shifting the data and a clause to bind the vendor to let you export all the data before complete shutdown.

We hope this article answered all your SaaS questions.


SaaS models aren’t gaining popularity — to the degree that few people ask what is SaaS — because of smart marketing or because developers are forcing them on clients. They’re gaining the majority of market share of business applications because they provide substantial benefits for both the developers and users. While switching to a SaaS model may require an overhaul of your business strategy, there is a strong likelihood that the switch will vastly increase your odds of long-term success.