What is Software as a Service (SaaS)?

Written by: Lizzie Danielson

Published: 10/10/25

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Software as a Service (SaaS) is a cloud-based software delivery model where applications are hosted remotely by a provider and accessed by users through the internet, typically via a web browser. Instead of installing and maintaining software on individual computers or servers, users subscribe to access applications that run on the provider's infrastructure.

Key Takeaways

By reading this guide, you'll learn:

How SaaS differs from traditional on-premise software installations
The core security implications of cloud-based software delivery
Why SaaS has become a dominant model for business applications
Common examples of SaaS applications used across industries
Key cybersecurity considerations when adopting SaaS solutions
Best practices for secure SaaS implementation in your organization

Understanding the SaaS Model

Think of SaaS like subscribing to a streaming service rather than buying physical DVDs. Instead of purchasing software licenses and installing programs on your computer, you pay a subscription fee to access applications hosted on remote servers. The provider handles all the technical heavy lifting—maintenance, updates, security patches, and infrastructure management—while you simply log in and use the software.

This model represents a fundamental shift from the traditional approach where businesses had to purchase individual licenses, install software on each employee's computer, and maintain their own servers. With SaaS, the software lives in the cloud, accessible from anywhere with an internet connection.

How SaaS works

SaaS operates through a multi-tenant architecture, where a single instance of the software serves multiple customers simultaneously. Here's how the process typically works:

Access and Authentication: Users log into the application through a web browser or mobile app using secure credentials. The SaaS provider manages user authentication and access controls.

Data Processing: When you interact with the application, your data is processed on the provider's servers, not your local device. This enables real-time collaboration and ensures all users work with the most current information.

Storage and Backup: Your data is stored in the provider's secure data centers with automatic backups and redundancy measures to prevent data loss.

Updates and Maintenance: The provider automatically updates the software, applies security patches, and maintains the underlying infrastructure without any action required from users.

SaaS security considerations

While SaaS offers numerous advantages, it also introduces unique cybersecurity challenges that organizations must address proactively.

Data location and control

When you move to SaaS, your sensitive business data resides on servers you don't directly control. This shift requires careful evaluation of where your data is stored, how it's protected, and what happens if you need to retrieve or delete it. According to the National Institute of Standards and Technology (NIST), organizations should maintain clear data governance policies regardless of where information is hosted.

SaaS - One big juicy target paradox

SaaS applications are attractive targets for cybercriminals seeking to access multiple organizations' data through a single breach. Because of the heightened security risk and “always on + always exposed” nature of SaaS services, it is important to take precautions during the integration/implementation phase. Ask yourself, is there data that shouldn’t be placed in the SaaS environment? Can I anonymize or obfuscate my data beforehand? Can I bring my own encryption keys? Can I leverage retention policies to minimize my data exposure?

Identity and access management

Implementing strong identity controls—including multi-factor authentication, regular access reviews, and the principle of least privilege—becomes critical for protecting your SaaS environment.

Vendor security practices

Your organization's security is only as strong as your SaaS provider's security measures. Before adopting any SaaS solution, thoroughly evaluate the vendor's security certifications, compliance standards, and incident response procedures. Look for providers that maintain their own certifications like SOC 2 Type II, ISO 27001, or industry-specific compliance standards.

Integration risks

SaaS applications rarely operate in isolation. They often integrate with other systems, creating potential security gaps if not properly configured. Each integration point represents a potential entry vector for cybercriminals, making it essential to audit and monitor all connections between your SaaS applications and other systems. Ensure integrations with other tools are using secure Authentication standards such as OAuth and leverage encryption in transit (such as TLS).

Benefits of SaaS adoption

Despite security considerations, SaaS offers compelling advantages that explain its widespread adoption:

Cost efficiency: Organizations avoid upfront hardware investments, software licensing fees, and ongoing maintenance costs. The subscription model provides predictable monthly or annual expense planning, often referred to as OpEx.

Scalability: SaaS solutions can quickly scale up or down based on business needs without requiring infrastructure changes or additional hardware purchases.

Accessibility: Employees can access applications from any device with an internet connection, supporting remote work and global collaboration.

Automatic updates: Providers continuously update software with new features and security patches, ensuring users always have access to the latest capabilities without manual intervention.

Disaster recovery: Most SaaS providers offer robust backup and disaster recovery capabilities that would be expensive for individual organizations to implement independently.

SaaS vs. traditional software models

Understanding how SaaS compares to other deployment models helps clarify when it's the right choice:

On-Premise Software: Traditional software installed on local servers gives organizations complete control but requires significant IT resources for maintenance and updates.

Infrastructure as a Service (IaaS): Provides virtualized computing resources but requires organizations to manage operating systems, applications, and security themselves.

Platform as a Service (PaaS): Offers development platforms for building applications but still requires technical expertise to create and maintain software.

SaaS sits at the opposite end of the spectrum, providing complete applications with minimal technical management required from the user organization.

Implementing SaaS securely

Moving to SaaS doesn't mean abandoning cybersecurity vigilance. Organizations that successfully leverage SaaS while maintaining strong security postures follow several key practices.

Start with a thorough vendor assessment that goes beyond surface-level security claims. Request detailed information about encryption standards, access controls, and incident response procedures. Many organizations also benefit from conducting third-party security assessments of critical SaaS applications.

Establish clear governance policies that define how SaaS applications can be procured, configured, and used within your organization. This includes guidelines for data classification, user access management, and integration with existing systems.

Implement robust monitoring and logging practices to maintain visibility into how your SaaS applications are being used and accessed. Many security incidents in SaaS environments go undetected because organizations lack adequate monitoring of cloud-based activities.

The cybersecurity landscape continues evolving rapidly, and SaaS security practices must evolve alongside emerging threats. Organizations that treat SaaS adoption as an ongoing security journey—rather than a one-time technology decision—position themselves to leverage these powerful tools while maintaining strong defensive postures.

Remember, the goal isn't to avoid SaaS due to security concerns, but rather to implement it thoughtfully with appropriate safeguards. When done correctly, SaaS can actually enhance your organization's security by providing access to enterprise-grade security capabilities that might otherwise be prohibitively expensive to implement independently.

Frequently Asked Questions

SaaS can be secure when proper due diligence is performed on vendors and appropriate security controls are implemented. Many enterprise SaaS providers invest heavily in security measures that exceed what individual organizations could implement on their own. However, security ultimately depends on both the provider's practices and how your organization configures and uses the service.

Reputable SaaS providers offer data export capabilities and will typically provide a reasonable period to retrieve your information after subscription termination. Always review the provider's data retention and portability policies before committing to a service, and regularly backup critical data independently when possible.

Most modern SaaS applications offer APIs and integration capabilities to connect with other business systems. However, integration complexity varies significantly between providers and applications. Evaluate integration requirements early in the selection process and consider working with IT professionals to ensure secure implementation.

Compliance responsibility is typically shared between you and the SaaS provider. The provider handles infrastructure compliance (like physical security and network controls), while you're responsible for configuring the application properly and managing user access. Review the provider's compliance certifications and shared responsibility model to understand your obligations.

Key areas to evaluate include data encryption (both in transit and at rest), access controls, audit logging, incident response procedures, compliance certifications, and the provider's track record with security incidents. Don't hesitate to ask detailed questions about their security practices—reputable providers should be transparent about their measures.

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What is Software as a Service (SaaS)?

Written by: Lizzie Danielson

Published: 10/10/25

Summarize This Page

On This Page

Key Takeaways

By reading this guide, you'll learn:

How SaaS differs from traditional on-premise software installations
The core security implications of cloud-based software delivery
Why SaaS has become a dominant model for business applications
Common examples of SaaS applications used across industries
Key cybersecurity considerations when adopting SaaS solutions
Best practices for secure SaaS implementation in your organization

Understanding the SaaS Model

How SaaS works

SaaS operates through a multi-tenant architecture, where a single instance of the software serves multiple customers simultaneously. Here's how the process typically works:

Access and Authentication: Users log into the application through a web browser or mobile app using secure credentials. The SaaS provider manages user authentication and access controls.

Storage and Backup: Your data is stored in the provider's secure data centers with automatic backups and redundancy measures to prevent data loss.

Updates and Maintenance: The provider automatically updates the software, applies security patches, and maintains the underlying infrastructure without any action required from users.