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What is SaaS (Software as a Service)?

SaaS means software as a subscription in the cloud. See the difference between SaaS, PaaS and IaaS, and what it means for cost, operations and security.

In short

SaaS stands for Software as a Service and means that software is delivered as a subscription over the internet instead of being installed and operated on your own servers.

The vendor handles operations, updates and security of the platform itself, while you simply log in via the browser. Microsoft 365 is the most widespread example in Danish businesses. The advantages are predictable costs, automatic updates and access from any device, while in return you need to stay on top of data processing agreements, an exit strategy and backup of your own data, which remains your responsibility.

SaaS is one of three service models in cloud computing; the other two are PaaS (platform) and IaaS (infrastructure), which for example Microsoft Azure delivers. MI Support IT helps Danish SMBs choose, implement and operate SaaS solutions securely, including licence management, access management and backup of your own data in the cloud.

Back to the glossary

What is SaaS (Software as a Service)?

What is SaaS? SaaS (Software as a Service) is software you subscribe to and use over the internet, instead of buying licences and installing the software on your own servers. The vendor owns and operates the entire underlying platform: servers, updates, uptime and baseline security. You typically pay per user per month and log in via a browser or app.

Well-known SaaS solutions in Danish businesses include Microsoft 365, finance systems such as e-conomic, CRM systems and HR tools. Common to them all: No servers on your premises, no manual updates, but no full control either.

SaaS vs. PaaS vs. IaaS: the differences explained

SaaS, PaaS and IaaS are the three service models in cloud computing. The difference lies in how much the vendor runs and how much you manage yourself. Microsoft describes the models thoroughly on learn.microsoft.com:

  • SaaS (Software as a Service): finished software, ready to use. Example: Microsoft 365. You administer users and data; the rest is the vendor's responsibility.
  • PaaS (Platform as a Service): a platform for building and running your own applications without operating servers yourself. Example: Azure App Service and databases in Microsoft Azure.
  • IaaS (Infrastructure as a Service): raw infrastructure: virtual servers, networking and storage that you configure yourself. Example: virtual machines in Azure, often as part of cloud hosting.

Rule of thumb: SaaS you buy, PaaS you build on, and IaaS you operate yourself in the cloud.

Advantages and disadvantages of SaaS

Advantages: predictable subscription costs without server investments, automatic updates and new functionality, access from any device and location, fast onboarding and easy scaling as you grow or shrink.

Disadvantages: ongoing costs that grow with the number of users and services, limited customisation options, dependence on the vendor's uptime and pricing policy, and a risk of "SaaS sprawl", where departments sign up for subscriptions on their own without any overview of security and licences.

Who owns the data in a SaaS solution?

The data is yours, but it lives with the vendor, and that comes with obligations. Three things need to be in place:

  1. Data processing agreement (DPA): a GDPR requirement whenever the vendor processes personal data on your behalf. See the guidance from Datatilsynet (the Danish Data Protection Agency) on the use of data processors.
  2. Exit strategy: how do you get your data out in a usable format if you switch vendors, and what happens to the data after termination?
  3. Backup responsibility: most SaaS vendors restore the platform, not your individual files and emails. Responsibility for backup of your own data is typically yours.

How MI Support IT can help

MI Support IT helps you choose the right SaaS solutions and make them work together, with control over licences, access, security and backup. We operate your entire cloud setup as part of cloud and hosting, so SaaS does not become a blind spot in your IT. Contact us for a review of your current subscriptions and agreements.

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