SaaS (Software as a Service)

A software distribution and licensing model where applications are hosted centrally (typically in the cloud) and provided to customers via internet subscription rather than purchased outright and installed locally. SaaS eliminates software installation, maintenance, and update burdens, vendors handle infrastructure, security, and improvements while customers access applications through browsers or apps. Customers pay recurring subscriptions (monthly/annually) rather than large upfront licenses. Popular SaaS examples include Salesforce, Shopify, Microsoft 365, and Slack. The SaaS model has transformed software economics, enabling vendors to build recurring revenue while providing customers continuous improvements and predictable costs.

Why it matters

SaaS business model offers excellent economics: recurring revenue, high margins, scalability, and predictable growth. For entrepreneurs, no-code tools enable building SaaS-like businesses without development expertise, creating valuable recurring income streams.