Business software & SaaS

What is SaaS?

KKahu team·Updated 2 Oct 2026·5 min read

Illustration for the KahuLogic guide: What is SaaS?
Quick answer

SaaS stands for software as a service: software you use over the internet and pay for by subscription, instead of buying and installing it. Gmail, Xero, Canva and most CRMs are SaaS. The provider runs the servers, updates and backups, and you log in from any device.

SaaS in plain English

With traditional software you bought a licence, installed it on a computer and were responsible for updating it. With SaaS you open a website or an app, log in and use it. The software runs on the provider’s servers, your data is stored there, and you pay a monthly or yearly fee for as long as you use it.

How it differs from installed software

SaaSInstalled software
How you paySubscription, monthly or yearlyOne-off licence, plus upgrades
Where it runsThe provider’s serversYour own computer or server
UpdatesAutomaticYou install them
AccessAny device with internetThe machine it is installed on
Your dataStored by the providerStored by you

Why small businesses use it

  • Low start-up cost: no servers and no large licence fee.
  • Always up to date, with security fixes applied for you.
  • Works from the office, home or a phone on site.
  • Easy to add or remove users as the team changes.

What to check before you sign up

  1. 1The real costPrice per user, what each tier includes, and what happens to the price after any introductory offer.
  2. 2Your dataWhere it is stored, who can access it, and whether you can export everything if you leave.
  3. 3SecurityTwo-factor authentication, admin controls and how the provider handles incidents.
  4. 4ConnectionsWhether it works with the tools you already use, such as email, accounting and your website.
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Frequently asked questions

Is SaaS the same as cloud software?

Nearly. Cloud software is any software that runs on remote servers. SaaS is cloud software sold as a subscription service.

What happens to my data if I stop paying?

It depends on the provider. Check the export options and how long they keep your data before you need them.

Is SaaS secure?

Reputable providers usually secure their systems better than a small business could alone, but your account is still only as safe as your passwords and two-factor settings.

Further reading

  1. NIST definition of cloud computingcsrc.nist.gov
  2. Google for Small Businesssmallbusiness.withgoogle.com