SaaS (Software as a Service) is software you use over the internet and pay for per user or per month, without managing servers yourself — think of Microsoft 365, Exact Online, Shopify or your ATS. The vendor hosts, maintains and secures the software; you configure and use it.
SaaS in practice
For SMBs, SaaS has become the norm: low entry costs, automatic updates and access from anywhere. The downside is fragmentation. Anyone who buys a separate SaaS tool for every problem ends up, after a few years, with dozens of subscriptions, each with its own login, data island and invoice — and nobody with an overview.
Two rules of discipline keep it manageable: choose tools with an open API so they stay connectable, and clean up periodically (licences of departed employees, duplicate tools). And don't forget the data processing agreement for every SaaS service that processes personal data.
Related terms
- Tenant — A tenant is your own, walled-off environment within a cloud service such as Microsoft 365 or Google Workspace: all of your organisation's users, mailboxes, files, settings and security rules together.
- SLA — An SLA (Service Level Agreement) is the agreement between a service provider and customer about the level of service: response times for incidents, system availability, helpdesk opening hours and what happens if commitments aren't met.
- API — An API (Application Programming Interface) is a standardised way for software systems to make data and functions available to each other.
- Data processing agreement — A data processing agreement is the contract that the GDPR makes mandatory between an organisation (the controller) and any party that processes personal data on its behalf (the processor) — such as your IT partner, your ATS vendor or an integration platform.