What is SaaS?

SaaS stands for software as a service. It's software you use over the internet, usually in your web browser, and pay for with a subscription instead of buying it once and installing it. Gmail, Canva, Shopify, Zoom and QuickBooks Online are all SaaS. If you log in from any computer and get a bill every month, you're almost certainly using SaaS.

What does SaaS mean?

The name says it: the software is the service. The company that makes it also runs it on their own servers, keeps it updated and looks after your data. You get an account and a login, and that's it. It's pronounced "sass".

Before SaaS, you bought software in a box or as a download, installed it on one computer and paid again for the next big version. With SaaS there's nothing to install and you're always on the latest version.

How SaaS works

• You sign up and log in from a browser or a phone app. Nothing to install.
• The software and your data live in the cloud, on the provider's servers.
• Updates and fixes arrive on their own. You never download a new version.
• You pay monthly or yearly, usually by plan, by number of users, or by how much you use.
• You can stop paying when you stop needing it.

SaaS examples you probably already use

• Email and documents: Gmail, Google Docs, Microsoft 365
• Design: Canva, Figma
• Online stores and websites: Shopify, Squarespace, Wix
• Accounting and payments: QuickBooks Online, Xero, Stripe
• Meetings and chat: Zoom, Slack
• Email marketing: Mailchimp, Kit
• Customer management (CRM): HubSpot, Salesforce
• Screen recording and walkthrough videos: Loom, Puradoc

SaaS vs PaaS vs IaaS

These are the three main kinds of cloud computing. The difference is how much the provider runs for you.

• IaaS (infrastructure as a service): rented servers, storage and networking. You set up and run everything on top. Examples: Amazon Web Services (EC2), Google Compute Engine, DigitalOcean.
• PaaS (platform as a service): a ready-made place to run code you write. The provider handles the servers; you bring the app. Examples: Heroku, Vercel, Railway.
• SaaS (software as a service): the finished app, ready to use. You bring nothing but a login. Examples: everything in the list above.

If you're not a developer, SaaS is the only one you'll use day to day. The other two are what SaaS companies build on. Puradoc itself is SaaS that runs on PaaS: Vercel and Railway.

Why SaaS works so well for small businesses and solopreneurs

• Low cost to start: a few dollars a month instead of a big one-off license, and often a free plan or free trial.
• Works anywhere: your laptop, a client's office or your phone.
• Always up to date, with no IT person needed.
• Grows with you: upgrade the plan when you need more, downgrade when you don't.
• Backups and security are the provider's job.

How SaaS companies make money

Recurring revenue. Instead of one big sale, a SaaS business earns a smaller amount from each customer every month for as long as they stay. That's why SaaS founders talk about MRR (monthly recurring revenue) and churn (the share of customers who cancel each month). Most use a free trial or a free plan ("freemium") so you can try the software before you pay.

Is SaaS the same as cloud software?

Close. All SaaS is cloud software, but "the cloud" also covers the PaaS and IaaS layers underneath. When someone says "a cloud app" they usually mean SaaS.

Is a mobile app SaaS?

It is when the app is a window onto an online service you subscribe to, like the Shopify or QuickBooks apps. A one-time-purchase app that works offline isn't.

Building a SaaS? People need to see it

Here's the part most SaaS founders find out the hard way: software is hard to explain in words. A list of features doesn't make anyone sign up. A short video of the app doing its job does, on your homepage, in sales emails and in onboarding for new users.

The catch is recording one. You know your app inside out, but the moment you hit record the words come out as "um, so, if you click here". That's why we built Puradoc. You click through your app, and Puradoc writes a clean script, reads it in a natural voice and zooms in on your clicks. See how it works as a screen recorder for SaaS apps, or start free.