Software as a service (SaaS)
What is software as a service (SaaS)?
Software as a service, or SaaS, is software used through a browser on a subscription, instead of being bought and installed on a server of your own. The provider runs the program, the servers, the updates and the security, and you pay monthly or yearly, usually per user or per volume. It starts quickly and costs predictably, while the data and the rules stay on the provider’s side.
Example
A company with four people in sales uses a customer system at €29 per user per month. That is €116 a month, €1,392 a year and €4,176 over three years, with no server and no installation day. The same program on the company’s own server would start with a licence and an implementation and continue with hosting and an administrator. The amounts are illustrative.
The arithmetic reverses as the company grows. Twelve users instead of four is €348 a month; add a fee per order or per email sent and the subscription grows with turnover rather than with the benefit. So a SaaS price is read three years forward, in the scenario where the business succeeds.
The other thing read in advance is the exit: what format the data comes out in, how long the provider keeps it after cancellation, and whether it can move to the next system through an API.
Why it matters for a business
SaaS is the right answer for everything that does not distinguish you from a competitor: email, accounting, helpdesk, e-signatures, analytics. Nobody wins by running their own mail server.
It becomes arguable where the core of the business sits — the catalogue, the orders, the warehouse — because there someone else’s release schedule, limits and pricing become yours. That comparison is worth making on total cost and on freedom to move the data, not on the monthly fee, before a platform of your own comes onto the table.
There is a legal part as well. Where a provider processes personal data on your behalf, Article 28 of the GDPR requires a written processing agreement, and the choice of provider remains your responsibility — including where the data is stored and who can reach it.
What to ask
- How is the price built: per user, per volume, per transaction — and what happens when the work doubles?
- How does the data come out, in what format, and is there an API to your other systems?
- Where is the data stored, and is there a data processing agreement?
- What notice period applies, and how does the price change on renewal?
- Is there an uptime commitment, and what follows an outage?
- Which features are in your plan and which are a paid add-on?