SaaS is web-based software accessible through the internet. Since SaaS adopts cloud computing technology, there’s no need for installing desktop applications — users simply subscribe to a service hosted on a remote server. For example, Netflix is a B2C SaaS platform that offers licensed videos on-demand and follows a subscription model.
The global SaaS market is expanding rapidly and will hit $436.9 billion in 2025. While COVID-19 is causing dramatic shifts in business due to telecommuting and social distancing, more companies rely on the SaaS model. Let’s take a closer look at the benefits of SaaS for business.
The SaaS model benefits software providers and their customers. For developers, SaaS allows a recurring revenue stream and faster deployment compared to traditional on-premise software. For companies, SaaS offers the chance to reach a wider audience and save software development and maintenance costs.
Here are the top advantages of choosing SaaS for business:
Cost-effective. A software vendor holds all maintenance and infrastructure costs.
Accessible. SaaS products can be accessed from anywhere via a web browser.
Scalable. Customers can change their usage plans anytime without hassle.
Easy to integrate. SaaS solutions support multiple integrations with other platforms.
Secure. The decentralized nature of cloud-based technology protects user data from breaches and loss.
Come with free service. SaaS provides automated backups, free updates, and swift customer support.
Easy to use. A friendly interface and simple user flow make SaaS easy to use for everyone, regardless of their technical skills.
Offer free trials. Most SaaS vendors allow you to try it before you buy it.
The best part is that SaaS fits all industries and company sizes, so both large and small businesses can benefit from it equally. In the next chapter, we will explore different categories along with the most prominent examples of SaaS software.
As we mentioned earlier, the SaaS market is huge and highly segmented. The cloud service model has reached all business niches and generates billions of dollars in revenue for SaaS companies. For example, Salesforce — the world’s largest SaaS provider — made $17,1 billion in 2020 alone.
While the complete list of SaaS categories can be extensive, we will cover the most widely used ones.