Software as a Service(SaaS)

Software as a Service is the dominant software delivery model of the 2010s and 2020s: software accessed via the web on a subscription basis, hosted by the vendor (cloud), with the vendor handling all infrastructure, updates, and security. Compared to traditional licensed software, SaaS offers lower upfront cost, faster deployment, automatic updates, and easier scaling.

SaaS economics are distinctive: high upfront customer acquisition cost amortized over multi-year customer lifetime, high gross margins (70-85%), recurring revenue creating compounding value, and metrics like MRR/ARR/churn that don't apply to traditional software.