Software as a Service (SaaS)

At a glance

Software as a Service is, along with Infrastructure as a Service and Platform as a Service, one of the three service models for cloud computing. This service model is about offering customers selected software on demand via the cloud: Providers of SaaS provide pre-installed software on scalable systems.

Technical requirements

From the company's point of view, the technical requirements are simple: if you want to use the programs offered, you can do so from practically any computer with a stable Internet connection. Users can usually access cloud-based applications via a conventional browser. In principle, a thin client, a laptop or an average office PC is sufficient to use Software as a Service in a company.


Software as a Service has advantages for companies of all sizes. It makes the use of software uncomplicated and frees up the in-house IT department for more important tasks. Some of the main advantages are:

No installation
The provider provides completely pre-installed applications via an Internet connection. It is not necessary to install the programs on each employee's PC, as is the case with on-premise software; whoever wants to use the software logs on online and can start working directly.

No license fees
On-premise software usually incurs high license fees per workstation. In contrast, as a price model for SaaS, many providers have adopted a comparatively inexpensive monthly subscription: customers pay a monthly fee, which depends on the desired scope of functions and the number of users, for example. As a rule, a company only pays the exact number of licenses it needs.

The number of participants can be adjusted flexibly and relatively quickly to actual requirements, e.g. if more or fewer licenses are required at times due to seasonal fluctuations.

Low infrastructure costs
The software is executed directly on the provider's server and operated via the Internet connection. The operator maintains and manages the entire infrastructure behind the software. Instead of providing expensive infrastructure for hardware-intensive programs, a company can work with relatively economical hardware. Only a stable and powerful Internet connection should be guaranteed.

No maintenance effort
Updates and new versions of the software are installed centrally on the server by the operator of the offer. This means that every user who accesses an application via SaaS automatically uses the latest version. During operation, there is no expenditure for the maintenance of the software per workstation. And the software provider no longer has to worry about maintaining updates for older versions of his application.


Software as a Service is already very important in the business environment, especially when it comes to CRM or ERP applications. SaaS also plays a growing role in connection with IoT applications. With Azure IoT Central, for example, Microsoft offers web-based software that can be used to quickly and effortlessly manage and network IoT resources.