SaaS (software as a service) is a software delivery model where you don't install the app on your own servers or computers, but access it through a web browser and pay a recurring subscription for it - usually monthly or annually, based on the number of users.
The difference from the older model (buy a license, install it on your own server, manage updates and backups yourself) comes down to who carries the operational responsibility. With SaaS, the vendor takes it on - handling availability, security, backups and updates, while the customer pays for use, not for owning the infrastructure.
Most business tools today - CRM, project management, invoicing, no-code platforms - run as SaaS. The upside is a fast start with no infrastructure investment; the downside is dependence on the vendor and the need to check upfront where, and for how long, the vendor keeps your data.
Related: Backups and data security: what's on you, and what's on the platform, What a custom app costs in 2026.