Term · Custom software
SaaS (software as a service)
With SaaS you use software via the internet and pay a subscription. The supplier takes care of the servers and the updates.
In short
SaaS stands for software as a service: software that you use via the internet and that the supplier manages for you. You pay a subscription, often per user per month. Well-known examples are Microsoft 365, Google Workspace and Exact Online.
What is SaaS?
SaaS is software that you use via the internet and for which you pay a subscription. You do not install anything on a server of your own. The supplier manages the software, the servers and the updates. SaaS stands for software as a service.
Well-known examples are Microsoft 365, Google Workspace and Exact Online. Many CRM packages work this way too.
How does SaaS work?
You create an account, choose a subscription and log in via the browser or an app. The software runs in a data centre of the supplier, or of a party it hires. Your data is stored there too. The price usually depends on the number of users and on the features you choose.
Example in an SME
Made-up example
An office with ten employees uses an online accounting package, an online CRM and online email. There is no longer a server in the office. Everyone works in the browser, at home too.
What are the pros and cons of SaaS?
- Pros. You can start straight away. The supplier keeps the software up to date. And you can work anywhere there is internet.
- Cons. You pay for as long as you use it, and the price can go up. You work the way the package intends. And your data is held by another company.
What should you look out for?
- Personal data. Does the supplier store personal data for you? Then you sign a data processing agreement with it. That follows from the GDPR.
- Taking your data with you. Check in advance whether you can export your data if you switch.
- Integrating. Does the package have an API? Then you can connect it to other software later.
SaaS and custom software go well together: a package for the ordinary work, custom software for what is special. Read how I approach that in custom software.
Frequently asked questions
What is the difference between SaaS and the cloud?
Cloud is the broader word: everything that runs elsewhere via the internet, such as storage and servers. SaaS is software from the cloud that you use ready-made.
Is custom software also SaaS?
Not in the usual sense. SaaS is one package for many customers. Custom software is for one business. Custom software can run in the cloud, though, with hosting and maintenance per month.
Is SaaS safe?
That depends on the supplier and on how you set it up. Turn on two-factor authentication, give employees only the rights they need and read the agreements about your data.
Sources: Exact: Exact Online (in Dutch), Microsoft 365: plans for businesses (in Dutch), Google Workspace: prices per user per month and the GDPR (Regulation (EU) 2016/679), Article 28 (in Dutch). Consulted on 7 October 2026.
This is an explanation in plain language, not legal advice.
Written by Bart van Engelenhoven Founder of Uniekaiconsultancy in Ede, the Netherlands. Bart analyses how SMEs work and builds software, integrations and AI applications himself. Last updated: 7 October 2026
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