What Is SaaS and Why Is It Growing Worldwide?

Software as a service, or SaaS, gives organizations access to an application operated by a provider over a network. Instead of installing and maintaining the entire application themselves, customers typically use it through a browser or an app and pay a recurring or usage-based fee.

For buyers, the attraction is faster access to useful software with less infrastructure to manage. For product companies and partners, SaaS can create opportunities to deliver and improve services across markets. Neither outcome is automatic: costs, connectivity, security, and customer needs still determine whether the model works.

How SaaS works

In the NIST definition, SaaS means using a provider’s application running on cloud infrastructure. The customer generally does not control the underlying servers, operating systems, or storage, although configuration options are often available. csrc.nist.gov

Examples include online email, customer relationship management, accounting, and collaboration applications. A provider commonly handles the application and underlying infrastructure; the customer remains responsible for decisions such as who gets access and how the service is configured.

SaaS, PaaS, and IaaS: the difference

• SaaS: Use a finished application.
• PaaS: Use a platform to develop or deploy applications.
• IaaS: Use computing resources, such as servers and storage, while managing more of the software stack.

These are service models, not competing product categories in every situation: a company can build a SaaS product using PaaS or IaaS. csrc.nist.gov

Why is SaaS growing worldwide?

Demand has several practical drivers. Subscription pricing can reduce the initial purchase burden; shared access can support distributed teams; and provider-managed updates can reduce some internal maintenance. Organizations can also add users or features as needs change, subject to the product’s terms and technical limits.

There is evidence of expansion, but it should not be confused with a single worldwide adoption rate. In its third-quarter 2026 worldwide public cloud forecast, Gartner describes SaaS as maintaining a more measured growth trajectory while customers balance AI adoption and application optimization. That is a forecast, not a count of actual SaaS users. gartner.com

Regional data shows a related trend. Eurostat reports that 52.7% of surveyed EU enterprises used paid cloud services in 2025, up 7.4 percentage points from 2023. This measure includes infrastructure and platforms as well as applications, so it is not a SaaS-only figure. The survey covers enterprises with at least 10 employees or self-employed persons in specified sectors. ec.europa.eu

Connectivity helps extend the potential market, but access is uneven. The International Telecommunication Union estimates that almost three-quarters of the world’s population was online in 2025, while 2.2 billion people remained offline. For a SaaS provider, that makes bandwidth, affordability, language, and device support important design considerations rather than afterthoughts. itu.int

What should buyers check before choosing SaaS?

• Fit and adoption: Test essential workflows with actual users. Check accessibility, languages, mobile support, training, and support hours.
• Total cost: Compare subscription fees over several years, including implementation, integrations, storage, usage, support, and renewal terms. Review inactive licenses regularly; the FinOps Foundation identifies unused licensing as a source of waste. finops.org
• Security and continuity: Clarify responsibilities for identity, permissions, backups, recovery, incident notifications, and service availability. Ask what happens during an outage.
• Data and exit: Check where data is processed, what contractual and regulatory requirements apply, and whether records can be exported in a usable format. Test an export before making the service critical.
• Integration: Verify available interfaces, usage limits, and the work needed to connect existing systems. A promised integration is not the same as a tested workflow.

Cloud security is a shared responsibility. CISA’s secure cloud guidance distinguishes the provider’s responsibility for the underlying SaaS platform from the customer’s responsibility to configure its chosen services. Assign owners for both sides of that boundary. cisa.gov

Buy, customize, or build?

Buy when an established product covers the important requirements and its constraints are acceptable. Combine or customize existing services when integrations or limited configuration can address gaps without recreating standard functions. Build when a distinctive workflow, product opportunity, or control requirement justifies the ongoing cost and responsibility.

Before committing to a custom product, define the intended users, a small initial scope, ownership of the code and data, and a budget for maintenance after launch. Compare the options over a realistic operating period, not just the first implementation invoice.

Where partners and investors can add value

A SaaS partnership can involve product development, integration, implementation, user adoption, or access to complementary expertise. Agree on deliverables, decision rights, intellectual property, support handoffs, and how success will be measured. For international work, also test language support, local buying needs, and data-handling requirements in each target market.

For investors evaluating a SaaS business, recurring revenue alone is not proof of durable demand. Examine customer retention and expansion, acquisition costs, gross margins, implementation effort, concentration risk, and the cost to serve and support customers. Assess AI features on demonstrated customer value and operating cost rather than treating them as a growth guarantee.

Altweeb’s software and digital product development, technology consulting, and IT staffing services are relevant to organizations assessing delivery options or seeking additional development capacity. The appropriate scope depends on the product, existing systems, and the partners involved.

Conclusion

SaaS makes applications available as an ongoing service rather than a one-time installation. Its reach is expanding, but a sound decision still depends on fit, full lifecycle cost, security responsibilities, and a credible plan for change or exit. Start with one business problem, test the options, and scale only after the results are clear.

To explore this further, see Digital products built around specific needs..