How does SaaS differ from traditional software?

SaaS (Software as a Service) differs from traditional software primarily in how it is delivered, maintained, and priced. Unlike traditional software, which is installed locally on individual machines or servers, SaaS applications are hosted remotely and accessed via the internet through a web browser or API. This fundamental shift eliminates the need for users to manage infrastructure, handle updates, or maintain compatibility with local hardware. For example, tools like Google Workspace (SaaS) are accessed through a browser, while legacy software like Microsoft Office 2019 requires local installation and manual updates.

A key distinction lies in the cost and ownership model. Traditional software typically involves a one-time purchase fee (or perpetual license) plus optional maintenance costs for updates or support. SaaS, by contrast, operates on a subscription basis, where users pay recurring fees (monthly or annually) for access. This shifts capital expenses (CapEx) to operational expenses (OpEx), which can simplify budgeting for teams. For developers, this means SaaS providers handle server costs, scalability, and uptime, whereas traditional software might require in-house infrastructure management. For example, a company using Salesforce (SaaS) doesn’t need to deploy servers, while an on-premises CRM system would require dedicated IT resources to maintain.

Finally, updates and customization differ significantly. SaaS providers roll out updates automatically to all users, ensuring everyone uses the same version without manual intervention. Traditional software often requires users or IT teams to manually install patches or major version upgrades, which can lead to fragmentation (e.g., some teams using Windows 10 while others stay on Windows 7). For developers building SaaS products, this means designing for continuous integration and backward compatibility. However, traditional software may allow deeper customization of local installations, such as modifying source code or integrating with legacy systems, which SaaS typically restricts due to its shared, multi-tenant architecture.