SaaS — what it is and when subscription software makes sense for a business

SaaS is short for software as a service. Instead of buying a licence, installing a program on every computer and keeping it patched yourself, a business pays a subscription and uses a ready-made application through a browser or a mobile app. The servers, the updates, the infrastructure backups and the ongoing development of the software sit with the provider.

The most precise description comes from the US standards body NIST, which has been the industry's reference point for over a decade. By its definition, SaaS is "the capability provided to the consumer is to use the provider's applications running on a cloud infrastructure" (NIST SP 800-145). The customer doesn't manage the servers, the operating system or the application itself — at most, the settings the application exposes to users.

This hub answers the four questions that come up once a business starts using SaaS deliberately, or starts thinking about building its own product in that model.

SaaS examples — what businesses run on every day

Most businesses use SaaS before they ever stop to think about it. Webmail in a browser, an online office suite, shared drives for documents, invoicing and accounting software, a CRM system, a booking tool for appointments — all of that is SaaS.

How many businesses use these tools is something Eurostat actually measures. In 2025, 52.7% of EU enterprises with at least 10 employees bought paid cloud services. The categories bought most often were e-mail (44.9% of firms), office software (37.8%) and file storage (37.7%) — all comfortably ahead of database hosting (24.0%) and computing power for a business's own applications (14.9%) (Eurostat, isoc_cicce_use). That gap is the shape SaaS adoption takes across Europe: ready-made tools first, a company's own systems much later, if at all.

A decade ago the picture looked very different. In 2014, just 17.8% of EU enterprises bought paid cloud services; by 2025 that figure had tripled.

SaaS vs software installed in-house

The difference isn't only where the program runs. It changes who does the work, and how you pay for it:

• Payment. A subscription replaces the one-off licence — usually priced per user or per usage tier. The starting cost is low, but you keep paying for as long as you keep using it.
• Maintenance. Updates, security patches and servers sit with the provider. You don't need an administrator for the software itself.
• Access. The application works anywhere with an internet connection and a browser — which makes remote work and multiple offices far easier.
• Control. You use what the provider built, on the provider's release schedule. You can only adjust what the settings allow.

SaaS is one of three cloud service models — alongside IaaS, where you rent servers, and PaaS, where you rent a platform to run your own applications on. How they differ, and which layers stay on your side of the line, is what we cover in the cloud computing article.

When SaaS makes sense, and when your own software is better

SaaS wins where a business's process looks like the process at thousands of other businesses: e-mail, documents, invoices, calendars, a basic CRM. You're paying for a tool someone else has already built and refined across many customers, instead of building it from scratch.

It stops winning when the process is what makes the business different, when several SaaS tools have to be glued together by copying data by hand, or when the team's subscriptions, added up over several years, exceed the cost of a system of your own. How to make that call is what we cover in the custom software article.

Security and data in SaaS

A SaaS provider is responsible for its own infrastructure and application, but the data, the user accounts and who has access to what stay on the business's side. If personal data lives in the service, you also need a GDPR data processing agreement with the provider. What to check before you sign — from where the data is stored to how you get it back if you switch service — is covered in the cloud data security article.

An example of SaaS from the provider's side: DVN Links

We know the SaaS model from the other side too. DVN Links is our own product — a European link management platform with click analytics and QR codes. It works exactly as the NIST definition describes: a customer opens an account in a browser, creates links and watches the statistics, while the servers, updates and further development of the service sit with us. Data is stored on servers in the EU.

It's also an example of SaaS as part of a bigger system. The site you're reading right now uses DVN Links through its API: when we publish an article, the content management system requests a short link for it automatically, and updates that link whenever the address changes. Nobody copies addresses by hand. That's what a typical SaaS integration with a company's own software looks like — a ready-made service does one thing well, and connects to the rest of the system through an API.

If you want to build your own SaaS product

The SaaS model also works the other way round — as a business of your own. Two articles in this section deal with exactly that:

• How to sell a product on subscription — freemium, a free trial or a card-required trial, and the metrics that actually decide between them: MRR, churn, LTV:CAC. Built on report data, not opinions: freemium or a free trial.
• What product to build — a narrow niche, an MVP in a few weeks, pricing and first customers, with 35 ideas grouped by industry: micro-SaaS ideas.