What is a SaaS?

You may have heard the term SaaS (Software as a Service). It's a cloud-based software delivery model where a provider hosts applications and makes them available to users over the internet, typically for a subscription fee, so the provider can afford the hosting costs & other services. Access at 06/17/2026

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What changed between the past and the present?

A long time ago, creating a new software company required an office, your own hosting servers, a sales team, technical support and a lot of money to get started with. With the current technology, a single person can announce a new product on the internet using cloud services & automation!

You may be wondering: " What really changed between now and 20 years ago? "

The difference between the past and the present is that you can use cloud-based hosting services, online payments (for example: Stripe), AI to help you with support, marketing tools, automated deploy platforms and much more. That wasn't available in the past.

The key difference is that an employee earns a monthly salary, while a SaaS business benefits from recurring monthly revenue across diversified customers. Let's say David created a service—he has in total 500 customers, and his monthly subscription is $20.

Every month, his revenue across his customer base is $10.000 monthly, and it will keep growing as long as his customer base increases! In the past, there was a geographic barrier where you could only sell your service to people in your city, whereas now, a person from Japan can sell his service to people in Brazil, Portugal, Spain, United Kingdom and much more countries!

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A SaaS doesn’t copy big companies, it solves small problems.

If you ever plan to build one, here’s a advice: don’t try to copy big companies. There’s a reason they became large and valuable, they solved problems at the right time, when those ideas weren’t thought yet.

A lot of SaaS products solve specific & small problems, and also, you shouldn't get unmotivated because you have a few users. Make your service usable and then make it grow. Recently, I learned the 80/20 rule, created by Vilfredo Pareto, that suggests that around 80% of your revenue comes from 20% of your customers. Think about it: You should focus more of your time on those high value customers, and spend less time on those who demand a lot of support but contribute very little revenue.

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The future of SaaS alongside AI & Automations

Capture this, a solo freelancer developer with a really large customer base - instead of overwhelming himself handling payment services, answering FAQ, answering customers & deploying his service locally on his own servers... You get it. That's unworkable. So, he implemented an automation system in his SaaS & is hosting his services in a cloud-based platform.

Now, he won't need to hire other people to help him for now and won't get overwhelmed easily!

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It must be really easy to have revenue then!

Well... no. To create a small SaaS service, you must find the key problem to solve, create your costumer base that will generate recurring payments, give support, and much more. It might be easy to create one, but making it work is the hard part.

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TL;DR

A SaaS business is software delivered over the internet usually with recurring payments. Thanks to cloud-based services, automation, and global access, a solo developer can build and scale a product alone.

BUT, the real challenge is not building the software, but finding a real problem, attracting customers, and keeping them paying.