What Is SaaS?

SaaS stands for Software as a Service, a model where software is hosted in the cloud and delivered to users over the internet, typically on a monthly or annual subscription basis. Instead of buying and installing software once, users pay for ongoing access. Examples include Slack, Notion, Figma, Stripe, and most other business software used today.

From a business model perspective, SaaS is attractive because of its predictable, recurring revenue. Unlike one-time sales, subscriptions create compounding revenue that grows with the customer base. This predictability is part of why SaaS businesses are valued highly and why the model has become dominant in enterprise and consumer software.

From a technical perspective, building a SaaS product requires multi-tenancy (serving multiple customers from shared infrastructure), subscription billing (usually via Stripe or a similar payment processor), role-based access control, and a level of security and reliability that justifies ongoing payment. These requirements make SaaS slightly more complex to build than a simple single-tenant application.

Many MVPs are SaaS products. The subscription model is well-suited to early-stage validation because it creates an immediate signal of willingness to pay, if someone is willing to enter a credit card and subscribe, that is strong evidence of real demand. Building a SaaS MVP well means getting the billing, authentication, and tenant management right from the start.