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What Is SaaS? How Software-as-a-Service Can Boost Your Business

SaaS is flexible and affordable. But what is SaaS, exactly? And what about it makes it so popular? We'll answer that and many of your other pressing questions in this guide. Plus, we'll show you you can make the most of SaaS to build and grow your company across all aspects.

Software as a Service (SaaS)

SaaS is a software distribution model in which a cloud provider hosts applications and makes them available to end-users over the internet. It’s an acronym that stands for software as a service and describes any software that isn’t run at your premises, never resides on a local machine, and is a full-blown app on its own. 

A few examples of SaaS companies include Zoom, Slack, Canva, Microsoft, and HubSpot. 

Examples of SaaS companies. 

How Does SaaS Work?

Now that we’ve answered what SaaS is and understand what a SaaS platform looks like, we can spend a little more time discussing how it works. 

With 99% of companies reporting that they use at least one SaaS-based application and SaaS spending projected to hit $500 billion by 2023, you may even find you’re already relying on SaaS without realizing it. 

SaaS applications are delivered using the cloud delivery model. You only need your web browser to access them. 

There's no need to host the app on your server and worry about allocating the necessary resources or conducting database management.  You also don't need to download anything to your local system to manage and work in these business applications. Instead, you can access them online, in the cloud, and complete whatever tasks that need completing that way. 

Accessing and using cloud-based software works as follows: 

  • In most cases, you have to purchase a subscription to a product or service. 
  • Then, you have to log in to your account via your preferred web browser to gain  access to the applications or tools you wish to use. 
  • You don’t have administrative control over the app — all of that is handled by the provider. 
  • The provider handles updates and system changes — you merely have a user-based account. 

That may sound limiting on the surface. But an estimated 25,000 SaaS products are currently available, according to Statista, with countless satisfied users and customers who find this arrangement appealing. 

And that takes us directly to our next topic — the benefits. 

Software as a Service Benefits

SaaS has its benefits, with the most significant advantage being that you don’t have to install and maintain your applications. It makes it so end-users and large enterprise-level companies can run software applications without downloading anything. 

You don’t have to invest in a server or hardware to sustain the software. Instead, a standard computer is often all you need to use SaaS products. 

Image showcasing the benefits of SaaS. 

Other benefits worth noting include: 

Reduced Costs and Flexible Payments

Most SaaS products are delivered at a monthly or yearly subscription fee with affordable costs. That often makes complex software with high upfront costs much more accessible to people from all industries and company sizes. 

Although there are enterprise resource planning (ERP) SaaS vendors, you’ll often find these products provide tiered plans offering a range of services that scale up in price as demand within your organization increases. 

Additionally, there are no costs associated with maintaining your on-premise application. There’s no need to shell out a lot of money for expensive hardware or a server to support your team’s needs. 

Maintenance on server setups can be pricey, too. With SaaS, you don’t have to worry about that at all. Instead, you can focus on usual business management tasks rather than technical setup, configuration, and maintenance. 


As we mentioned above, you can scale up your plan in most SaaS solutions based on your needs, company size, and other requirements. 

And here's the good news: That also translates to how you can increase or decrease the number of features you have on-demand access to. 

With cloud services designed for all types of businesses, you'll undoubtedly find something suitable for your company without overwhelming you or your team with unnecessary functionality. Take HubSpot's plans, for example.

Getting started with HubSpot CRM.

You can get started with the complete HubSpot CRM for free and upgrade to a premium plan later. Or, you can opt-in for just the features you need with the Marketing Hub, Sales Hub, Service Hub, CMS Hub, or the Operations Hub. 

Automatic Updates 

SaaS model products are updated automatically, so you don’t have to worry about purchasing new app versions or upgrades. All of that is taken care of for you in the cloud. You don’t even have to click an “update” button sometimes — you’ll just get to enjoy new features. 

Administrative teams maintain these systems. The structure of the software delivery model is out of your hands. But the tools within are there for you to use. 


Another fantastic benefit of SaaS providers is that they are delivered through an Internet connection within your web browser, so the operating system you use doesn't matter. The Mac or Windows compatibility issues often associated with traditional software vendors just don't apply here. 

Plus, you can access your software from anywhere at any time. You're not limited to just your work laptop or iPad. And you also don't need to use a dedicated machine with the software installed on it. 

Instead, you access the SaaS from any computer or mobile device with a web browser installed. So long as you have your login information, you can access and use the tools you need in real-time, wherever you happen to be. 


Another benefit of relying on SaaS is you can customize which features you want and integrate your SaaS platforms with other tools and apps. One of the best things about SaaS is how different platforms play together. 

HubSpot offers a wide range of integrations.

For instance, HubSpot has integrations available for over 100 different SaaS apps, including services like Kissmetrics and Zapier. Cloud-based service providers can work together much more seamlessly than remote tools ever could. 

It truly opens businesses up for untold levels of collaboration. 

Are There Any Disadvantages to SaaS?

As with anything else, SaaS also comes with its own set of challenges. However, many find them not to be a deal-breaker. And to most, the pros outweigh the cons.

Let’s explore these potential drawbacks.

Issues Beyond Your Control

If a SaaS provider experiences a service disruption, you might be unable to use the platform for the interruption duration. Yes, on-premises software can have issues too. 

But if a cloud service provider has outages, there’s nothing you can tangibly do to fix the problem. You just have to sit tight and wait for it to be resolved. 

The same applies if the service changes its offer. For instance, if the company changes its pricing plans, feature availability, or other factors. 

And if a service shuts down completely, you might have to find a different SaaS solution altogether. The overall lack of control can be an issue for some.

Security Breaches

With an increase in cyber security threats in general, there is a possibility that a security breach might happen within the SaaS solution you’ve chosen. Cloud security relies heavily on individual user security, too. Selecting good passwords with two-factor authentication helps. 

However, the platform itself also needs to have robust security. 

No Control Over Versioning

Lastly, if the provider releases or adopts a new version of the cloud application, it’ll typically do so in a uniform fashion. That means the update or new revision will be rolled out to all customers whether or not they want it. 

That may result in accounting for extra time and resources for training your team and/or clients and customers.

Streamline Your Business With HubSpot’s SaaS Solutions 

Now that we've answered your pressing questions about what SaaS is, consider reaping the benefits of SaaS with HubSpot. 

Our solutions are free to get started. You can explore our many SaaS options, including our CRM's forever-free plan, or upgrade to a premium plan for added features once it’s time to scale. 

Get in touch with the HubSpot team to see if our Marketing Hub, Sales Hub, or our full CRM can help your startup or business grow and thrive.

Frequently Asked Questions

  • SaaS or software-as-a-service can take many forms. You’ll find that just about any online service or cloud application has a SaaS component. That means messaging apps like Slack, webinar apps like Zoom, backup and storage apps like Dropbox, and customer relationship management (CRM) tools like HubSpot qualify. 

    Other SaaS companies worth noting include Salesforce, GoToMeeting, Atlassian, and collaboration tools like Google Workspace. Even image editing tools like Canva qualify as SaaS tools. 

  • SaaS and the Cloud are closely connected, but they are not the same. SaaS describes a full software application that isn't run on a local machine but instead hosted and operated from the cloud. 

    As the end-user, you never have to download any software or app to use the service, and your work within it can be conducted from anywhere with access to a web browser.

    On the other hand, cloud computing services describe a virtual environment in which software, networks, data, and infrastructure are housed for software development or other server-side tasks — without ever interacting with a physical server.

    The two are closely related, but you can think of it this way: All SaaS applications are cloud-based but not everything having to do with the cloud is SaaS. 

  • SaaS, or Software-as-a-Service, describes the software application the end-user can access via a web browser. According to IBM, PaaS, which stands for Platform-as-a-Service, describes a cloud-hosted platform ready for software development, data processing, communications, app management, and other platform-based tasks. 

    It’s important to note another acronym you should know in this context: IaaS. IaaS or Infrastructure-as-a-Service is another cloud-based service. 

    But rather than delivering an application or a platform, it instead provides the infrastructure or resources to companies via the cloud to build and manage servers or networks, configure operating systems, and set up and manage data storage — all without needing to purchase and house expensive servers. 

  • Standard SaaS options often aren’t customizable outside of basic settings. However, enterprise-level companies can request customizations to SaaS solutions, as they’re paying a premium for expanded services.

    Sometimes, that results in changes to interfaces or the customer experience. In others, it refers to the addition (or omission) of various features.