SaaS

Business
About 1 min read

A service model where software is subscribed to and used over the internet as needed. It is a cloud-based approach that allows users to instantly utilize the latest AI features through a web browser or API without separate installation or server setup.

Also known as
Software as a ServiceSoftware as a Service

Detailed explanation

SaaS (Software as a Service) is a software delivery model where a cloud provider centrally hosts applications and users access them over the internet on a subscription basis. Users can instantly access the latest version of the software without having to manage hardware or go through complex installation processes. In the AI field, in particular, SaaS is a key model that enables individuals and enterprises to utilize large language models (LLMs) requiring high-performance GPU infrastructure at a low cost. Data processing and model computation take place on servers, offering the advantage of keeping the AI performance up-to-date at all times through automatic updates.

Why It Matters in Tool Selection

When adopting AI tools, the SaaS model converts capital expenditures (CapEx) into operating expenses (OpEx). Since AI technology evolves very rapidly, receiving real-time updates through SaaS, rather than building models in-house, is advantageous for reducing technical debt.

What to Check

  • Data privacy: Whether the entered data is reused for model training
  • Security compliance: Whether it holds international security standard certifications such as SOC2, ISO27001, etc.
  • Pricing structure: Whether it is user-based (seat-based) or AI usage-based
  • Scalability: Whether it seamlessly connects with existing work systems through API integration

Examples

Typical examples include productivity tools like Notion AI, design tools like Canva, and chatbot services like ChatGPT Plus. These services provide high-performance AI features directly in the browser simply by paying a subscription fee, without requiring users to maintain separate AI servers.

Confusing Terms

IaaS

A model that only rents out virtualized physical infrastructure such as servers and storage (e.g., AWS EC2)

PaaS

A model that provides platform and tool environments needed for app development (e.g., Google App Engine)

On-premise

A method where software is directly installed and operated on a company's own physical servers rather than in the cloud

Related terms

CloudAPI