What it means
With SaaS, customers sign up, log in through a browser or app and pay monthly or yearly. The provider hosts, updates and secures the software for everyone. CRMs, accounting tools and project boards are all common SaaS products.
Behind the scenes, most SaaS products are multi-tenant: one system serves many customers, with each customer's data kept separate.
Why it matters for a business
For buyers, SaaS means low upfront cost and no servers to run. For founders, it means recurring revenue, but also responsibility for uptime, security, billing and support. Building SaaS well needs more than features: accounts, permissions, subscriptions and scaling from the start.
A business example
Things to watch
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Plan billing, trials and failed payments early.
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Design tenant separation from the start.
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Budget for security, monitoring and support.
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Measure churn as closely as sign-ups.