How SaaS Works And Who May Be Interested in This Model?

The main advantage of SaaS-based solutions is the speed of their implementation. It makes such tools an ideal option for all kinds of startups and small projects that do not have a large staff. Thanks to the implementation of SaaS applications, a business can achieve stable profits after 6-12 months. If you are thinking about developing SaaS, then it is important to consider several factors, including the experience of the developers, the right SaaS technology stack, and the viability of such a solution. In this article, you will learn about the principles of operation of SaaS solutions as well as the most popular types of SaaS at present.

What is SaaS?

Software as a Service (SaaS), is a software distribution model where applications are hosted in the cloud and delivered to users over the internet. In this model, users subscribe to the software instead of purchasing it outright. This approach allows for easy scaling of usage, effortless updates, and reduces initial IT infrastructure costs.

SaaS is not considered a new concept. The model originated in the second half of the last century – in the form of terminals that were equipped with a keyboard and monitor, but did not have a processor. All devices were connected to a mainframe (the main computer of a computer center with a large amount of memory), where user data was located. With the development of technology, the SaaS system also changed. Today, these models have completely moved to the cloud, the information is stored there.

What is the difference between SaaS, PaaS, and IaaS? With PaaS, the operating system is managed by the provider, and the client controls exclusively the applications, without access to the operating system and low-level settings. IaaS provides access to computing resources in the cloud on a pay-as-you-go basis. The SaaS provider takes care of settings, updates, backups, and other technical components, while the client receives a customized program.

Advantages and Disadvantages of the SaaS Model

Pros of the SaaS model:

  • No overpayments. For business, this is 15-20% more profitable than standard software.
  • Reliable level of security. The information is hosted on the servers of a professional data center with a multi-level access control system, backup power supply, and backup Internet access channels.
  • No installation. All applications are in the cloud. Users do not need to download software onto their computer and wait for it to install.
  • Possibility of reducing the number of IT department employees.
  • Access to software from all devices.
  • Minimum requirements for devices from which users log into applications.
  • Lack of territorial reference.

Disadvantages of the model:

  • the need for a constant and uninterrupted connection to the network;
  • high level of data protection only in cooperation with reliable services;
  • limited functionality compared to classic software.

Another disadvantage of the Saas model is that it is not yet possible to expand the capabilities of such programs due to some features of web browsers.

How Software As A Service works

The operation of the model is quite simplified in comparison with standard software.

Work Via Web Interface

Everything is stored online, no storage media is required. Most often, such programs do not need to be installed. To work, you need to go to the software website, create an account using your personal email address, and receive a password. After this, you can log in and work with the application – to further use its tools, you just need to have a stable connection. If the client wants to leave the platform, he simply exports his data.

Access Fee

To gain access to certain functionality of the program, the user purchases a subscription with a fixed price. When the application is stopped, payments simply stop.

Support From The Service Provider

By purchasing a subscription to use the program’s functionality, the client will be able to contact technical support if any malfunctions occur in the software. With a high degree of probability, the issue will be resolved promptly and in a timely manner.

Examples of SaaS Work

CRM-SaaS and HRM-SaaS are one of the most popular types of Software as a service model.


CRM tools are software that is necessary to optimize customer service. It helps the manager bring the lead to the end of the sales funnel, collect statistics, and make the client a regular one. CRM allows you to track the stages of work and find weaknesses due to which the business suffers losses.

The program launches quite quickly. In addition, the business saves on operating costs allocated to setting up the program.

The main disadvantages of such tools are:

  • the need to transfer user databases to third party companies;
  • limited functionality for settings;
  • frequent failures resulting from integration with internal applications.

One of the most famous CRM products is the platform.


HRM systems help automate work with personnel. Their main goal is to streamline accounting and calculations, as well as reduce losses associated with employee departures. HRM-SaaS are quite complex, so working with them is more difficult than with CRM. An example of such programs is SuccessFactors HCM, SuccessFactors.

Invoice Creation SaaSΒ 

Invoice management systems are also popular SaaS used by companies of all sizes. Traditional invoicing methods can be time-consuming and error-prone for businesses with a large customer base and frequent invoicing needs, impacting efficiency and accuracy.Β 

Invoice creation SaaS platforms like Portant offer an ultimate solution by automating and streamlining the invoicing process. These systems reduce costs and resource usage by eliminating repetitive manual tasks, allowing employees to focus on more strategic activities.Β 

With ready-to-use invoice templates and the capability to send invoices directly to clients via integrated email features, SaaS platforms ensure consistency and professionalism in client communications. This enhances productivity and improves employee morale by reducing monotonous work.Β 

As businesses grow, SaaS platforms scale effortlessly, maintaining efficiency and performance, making them an essential tool for modern business operations.

Alternatives to SaaS Solutions

Alternatives to SaaS solutions can be applications that have mixed functionality with standard software and cloud structures. Most common alternatives:

  • S+S. The products work in approximately the same way, but instead of a browser, a special client is used.
  • IaaS. Such products provide access to virtual servers and cloud storage so that various companies can work with them using their own tools. The customer does not control the physical infrastructure but manages the software complex.
  • PaaS. A model in which the consumer receives a platform to run the application and cloud storage. Here it deploys software supported by the provider. The client cannot manage the infrastructure but does control its own applications.
  • Software rental. Each user is given a separate copy of the application. This is the main difference from SaaS, where all clients work with the same software. Such programs are considered more complex in terms of settings and administration.


The SaaS model helps automate business processes and increase company productivity, without requiring huge costs – both financial and time. The main thing is to choose wisely: make a list of the functions you need, study reviews of the programs, try the free version. Suppose you want to develop a SaaS solution and are looking for a reliable outsourcing SaaS development company that will help you implement the right SaaS tech stack. In that case, we recommend that you pay attention to JoinToIT.

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