SaaS (Software as a Service) – Definition

Software as a Service - A software licensing and delivery model where software is hosted centrally and licensed on a subscription basis.

SaaS eliminates the need for organizations to install and maintain software locally. Providers handle updates, security, and infrastructure, allowing businesses to focus on using the software rather than managing it. The subscription pricing model that typically accompanies SaaS shifts the cost structure from a large upfront capital expense to a predictable, recurring operating expense, which changes how organizations budget and evaluate return on investment. Vendor lock-in remains a relevant concern even in SaaS models, though: while the software itself is easy to stop paying for, migrating years of accumulated content, configurations, and integrations to a different platform can be substantial work, which is why evaluating a SaaS vendor's data export capabilities and API access is part of responsible vendor selection. For e-commerce specifically, SaaS platforms like Salesforce Commerce Cloud benefit from automatic scaling during traffic spikes — a capability that would require significant manual infrastructure planning in a self-hosted model.