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SaaS: Definition, Differences, and Characteristics

Last updated: Oct 27, 2022

What is SaaS (Software as a Service)?

Software as a Service, or SaaS, is a cloud computing-based service that provides software to users online. The other terms are web-based software, on-demand software, and hosted software.

As a cloud computing service, the computing-based service is stored and operated on an external server belonging to the service provider. With that, users do not need to download the software to their computers.

Not only that, the software providers with such a model actively store, maintain, update, and run the software and its database on their cloud servers. That is why the proper term for the cloud is a service as opposed to a product.

You can use a browser to access Software as a Service. The trick is simply to enter the username and password as authentication. Registered users can immediately use it. Some of the examples of cloud computing-based services are Gmail and Google Docs.

Differences between SaaS, PaaS, and IaaS

The type of cloud computing service is not only limited to Software as a Service, but there are also others, namely PaaS and IaaS. Before going any further, let's understand first what the difference between SaaS, PaaS, and IaaS is in the table below:

SaaS (Software as a Service)

Ready-to-use cloud-based software provider services that end users can access online.

PaaS (Platform as a Service)

A cloud-based platform provider service that developers can use to create and run applications.

IaaS (Infrastructure as a Service)

Services that provide the infrastructure or framework that supports computer systems such as servers, databases, and networks.

Characteristics of Software as a Service

Previously, it was explained that the software which acts as a service has a fairly basic difference when compared to other software. For further understanding, let's learn what the characteristics of the cloud computing-based service are as follows:

Cloud Technology

SaaS is cloud-based software. The cloud itself is a remote website server that stores databases and runs application code through various data centers. Cloud technology allows all data from the software to be stored on an external server belonging to the service provider.

This means that users can access the software and their data on a variety of different devices without having to download it first. Thus, the possibility of a user's losing data on their device will be much reduced.

Access Online

Cloud technology is not only able to store data outside the user's device but is also able to operate application code on their main server. The existence of cloud infrastructure in the software means users have to connect to the internet first if they want the application to run.

Centrally Managed

Another characteristic of the cloud computing-based service is its centralized and synchronized management on the main server. This is different from software that generally requires its own device to run applications.

The use of this type of software that is centralized on the same server allows each user to access the application simultaneously. Thus, users can collaborate with other users while working on the same file.

Advantages and Disadvantages of SaaS

Both software that can be used as a service and traditional software have their advantages and disadvantages. As a user, you can weigh the advantages and disadvantages of each type of software and determine the best choice for you to use. The following are some of the advantages and disadvantages of cloud computing-based service:


  1. Flexible - Can be accessed from anywhere on a variety of different devices, making it suitable for those of you who need flexibility.
  2. Automatic updates - Service providers actively maintain and update software as the data and code reside on their servers.
  3. Scalability - As the usage load increases, the service provider ensures that application performance continues to improve.
  4. Efficient - The use of the service in enterprises can cut the budget for enterprise IT needs because the storage and management of applications is already handled by the service provider. Thus, the software will only require subscription fees. 


  1. Must be connected to the internet - Users must be online when using the software.
  2. Data Security - Management of data security and cyber security in the applications is the responsibility of the service provider. This can be a problem for large companies with very high security requirements because they cannot protect company data internally.
  3. Dependency - It can cause a company to become overly dependent on the service provider. As a result, the company will find it difficult when it comes to switching to a new application because the company's database is stored in the old application.
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