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8th June 2021

5 things you need to know about Software as a Service (Saas) and Platform as a Service (Paas)


8th June 2021

5 things you need to know about Software as a Service (Saas) and Platform as a Service (Paas)

In this blog we explain what the terms Software as a Service and Platform as a Service mean and the key benefits of each.

Software as a Service

1. What is Software as a service?

SaaS is a common method of software delivery that allows data to be accessed from any device with an internet connection and a web browser. The customer doesn’t need to buy the hardware or licence the software. In this web-based model, the software vendor hosts and maintains the servers, databases, and the code that makes up the application. The customer typically pays a monthly/annual fee to the software provider and the software provider makes the software available over the internet. The annual or monthly subscription fee for a SaaS system will typically include the software license, support, and most other fees.

SaaS is a popular alternative to traditional software installation systems, and can be thought of as a subscriber TV channel in which the user connects to a remotely located base on a central server and uses a license for accessing data.

Well known examples of SaaS include Salesforce, Dropbox and Google Workspace but it is becoming increasingly popular for many software packages that were previously provided for local installation on the customer’s own hardware.

2. How does it differ from the traditional on-premise “software as a licence” delivery model?

It differs in two key ways:

  • SaaS deployments don’t require extensive hardware, which allows buyers to outsource most of the IT responsibilities typically required to troubleshoot and maintain the software in-house; and
  • SaaS systems are typically paid within a subscription model, whereas on-premise software is usually purchased through a perpetual license, paid upfront.

3. What are the key features and benefits of SaaS?

A Subscription Model Saves Time

Instead of buying software and then installing it, SaaS users subscribe to the software on a monthly or an annual basis. The relevant applications are used online through files saved in the cloud. Since the application is already configured, the user has a ready-to-use application. This not only reduces installation and configuration time, but also cuts down the time wasted on potential glitches linked to software deployment.

More traditional software models often come with cumbersome and time-consuming installations which can take several weeks to implement.

All the customer needs is an internet connection and log in information to access the new software. As long as an internet connection is available, the applications can be accessed from any location.

For a software provider, the benefits of easier and quicker deployment to the customer are that there is likely to be a shorter lead time before revenue is generated.


Since SaaS systems are cloud-based, they are easily scalable and can be quickly integrated with other similar systems. SaaS vendors usually perform upgrades and updates automatically as soon as they are ready, saving time and resources for the customer.

Easy to Use

SaaS apps can be accessed through the internet and a number of mobile devices. The quality and consistency of user interfaces have also greatly improved in the past few years and users can easily and quickly learn how to use SaaS applications.

SaaS applications also provide ample scope for customisation to suit the requirements of specific industries and individuals.

Saving Costs

The monthly or annual subscription fees paid by companies for using SaaS apps are much easier to budget for. SaaS systems often come with the flexibility to change or cancel the subscription.
Money is also saved on capital expenditure involving infrastructure and hardware as well as hiring staff to manage the application. Besides the lower upfront costs linked with installing and implementing the system (which needs to be integrated with other software systems), SaaS also leads to lower maintenance for the end user.

The pay-as-you-go pricing models enable companies to pay only for what they are using and cut down heavy licensing fees.

For the supplier, it means a regular, recurring income, making it easier to manage cashflow and forecasts and to continue to invest in product development.

Enhanced Security

Since SaaS-based data is hosted on the cloud and usually backed up by the provider, it is typically more secure than traditional systems. If there is a security emergency that hits the company server or an employee’s computer, most data remains secure on the servers and database of the SaaS provider.

This is also useful as employees often use their personal devices for office work, and these can be susceptible to data loss. But as the data is held on the cloud instead of the employee’s personal device, it remains secure.

Platform as a Service

4. What is Platform as a Service (PaaS) and how does it differ?

PaaS is a form of software as a service delivery where the provider delivers hardware and software tools (the platform) to users over the internet. Usually, these tools are needed for application development for example, services such as application hosting and Java development. A PaaS provider hosts the hardware and software on its own infrastructure.

Whilst PaaS does not replace a company’s entire IT infrastructure for software development it does free developers from having to install in-house hardware and software to develop or run a new application.

PaaS products include AWS Elastic Beanstalk and Google App Engine.

Users will normally have to pay for PaaS on a per-use basis. However, some providers charge a flat monthly fee for access to the platform and its applications.

5. What are the key features and benefits of PaaS?

Programmers want to focus on code – not on building and maintaining infrastructure. That’s why platform as a service (PaaS) is popular as it provides easy access to a suite of development tools, meaning programmers can program – and businesses can quickly deploy new applications.

It’s also cost effective, allowing smaller organisations access to state-of-the-art resources without the big price tag. PaaS provides a path for accelerating software development by allowing companies to focus on what they specialise in without worrying about maintaining basic infrastructure.

How can we help?

If you are, or are considering becoming, a provider of either SaaS or PaaS we can draft or review your standard contract terms to ensure that they adequately reflect your commercial offering and that you are adequately protected. To receive either SaaS or PaaS you will likely be required to sign the provider’s standard terms and conditions which we can review on your behalf. Please contact a member of the IT Solutions, Software and Licensing team for further information.

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