Definition
Software as a Service is software you host and customers access on a subscription, instead of installing a one-time licence. The model lives or dies on recurring revenue, retention, and the cost to serve each account.
In the room
How the word shows up in a real conversation.
A clinic pays ₹1,499 a month for records in the browser. You ship updates once. That is SaaS. Selling them a CD and an AMC is not.
Common mistake
Calling any login screen SaaS. If you cannot upgrade everyone at once, you are still in the licence business.
See also
Monthly Recurring Revenue (MRR)
Predictable subscription revenue normalised to a month, excluding one-off fees.
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Annual Recurring Revenue (ARR)
Subscription revenue run-rate for a year, usually MRR × 12 for monthly books.
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Freemium
A free tier that is useful, plus a paid tier for the people who need more.
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Churn rate
Percentage of customers who stop using a service over a given period.
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