SaaS Explained: What Is SaaS and How Are Applications Hosted?

Key Takeaways

• SaaS means Software as a Service, where software is hosted centrally and accessed online.
• Cloud hosting lets SaaS providers manage infrastructure, maintenance, updates and availability.
• B2B SaaS is software designed mainly for organisations rather than consumers.
• SaaS marketplaces help businesses discover and purchase cloud software from multiple providers.
• Singapore businesses should review security, integrations, scalability, vendor reliability and PDPA requirements before adopting SaaS.

SaaS, or Software as a Service, delivers software over the internet instead of requiring users to install and maintain it on their own computers or servers. The provider usually hosts the application, manages updates and maintains the underlying infrastructure.

Common examples include accounting platforms, CRM systems, project management tools and email marketing software. Users normally open a browser, sign in and start using the application.

Google Cloud defines SaaS as centrally hosted software accessed through the internet, with the provider responsible for maintaining the software.

SaaS has become especially relevant as Singapore businesses continue to digitalise. IMDA reported that 95.1% of Singapore SMEs adopted at least one of six measured digital areas in 2024, while 97% adopted at least one sector-specific digital solution.

For a small company, SaaS can mean using accounting, payroll or collaboration software without maintaining dedicated servers. Larger organisations may use SaaS for CRM, analytics, HR, cybersecurity and other enterprise functions across multiple teams or locations.

The common idea is the same: the customer uses the application as a service while the provider manages much of the technical environment behind it.

Read More: Which Social Media Platform Is Best for Singapore Businesses?

How Is SaaS Different From Traditional Software?

Traditional software often required businesses to purchase licences, install applications locally and handle more of the maintenance themselves.

SaaS changes that model.

SaaS providers can usually deploy bug fixes, updates and new features centrally.

AWS describes SaaS as a unified operating model in which onboarding, billing, identity, operations and deployments can be managed collectively.

This can reduce the technical burden on customers, but SaaS is not completely hands-off. Businesses still need to manage user accounts, permissions, integrations, data access and internal policies properly.

They should also understand what happens if a provider changes its pricing, discontinues a feature or experiences an outage.

What Is B2B SaaS?

B2B SaaS is Software as a Service built primarily for organisations rather than individual consumers.

The term B2B means business-to-business, so the software is designed to help another organisation perform a business function.

Common examples include:

Customer management: CRM platforms for leads, sales pipelines and customer records.

Finance: Accounting, invoicing and expense management software.

Human resources: Payroll, leave, recruitment and employee-management tools.

Marketing: Email marketing, analytics and marketing automation platforms.

Operations: Project management, inventory, logistics and collaboration software.

Pricing may be monthly, annual, per user, based on usage or a combination of these models.

For example, a company might start with 10 users on an HR or project management platform and add more as the business grows. It does not necessarily need to replace the entire system each time headcount increases.

That flexibility is one reason SaaS has become closely associated with modern B2B software.

What Is a SaaS Marketplace?

A SaaS marketplace is an online platform where businesses can discover and often purchase SaaS applications from multiple providers.

Depending on the marketplace, businesses may also be able to compare, deploy or integrate different products.

Marketplaces can cover broad software categories or focus on applications built for a particular cloud platform or technology ecosystem.

A business might use one to find accounting, cybersecurity, analytics, customer service or collaboration software without researching every vendor independently from scratch.

However, being listed in a marketplace does not automatically mean a product is the right fit.

Businesses should still assess:

1. Business fit: Does it solve the right problem?
2. Integrations: Does it connect with existing systems?
3. Pricing: How do costs change as usage grows?
4. Security: What access and authentication controls are available?
5. Support: What happens when technical issues arise?

For Singapore organisations handling personal data, where data is processed and transferred can also matter.

How Do You Host a SaaS Application?

SaaS applications are typically hosted on cloud infrastructure that provides computing, databases, storage and networking.

Providers may use major public cloud platforms, private infrastructure or a combination of different hosting environments.

At a simple level:

The application runs on cloud resources. The provider deploys and maintains the software.

Databases store application data. This may include accounts, settings and customer information.

Users connect online. Browsers or apps communicate with the SaaS provider’s systems.

Authentication controls access. Users receive access according to their identity and permissions.

Infrastructure can scale. Computing resources may increase or decrease as demand changes.

Behind these steps may be APIs, load balancers, content delivery networks, backups, monitoring systems and cybersecurity controls.

For example, if usage increases sharply during a busy period, a SaaS provider may add computing capacity or distribute traffic across multiple systems. This helps the application handle larger workloads without requiring each customer to install new hardware.

The customer usually does not see this infrastructure directly. They simply log in and use the service.

Does SaaS Always Mean Multi-Tenant Hosting?

No.

A tenant generally refers to a customer using a SaaS environment.

Many SaaS platforms allow multiple customers to share infrastructure while keeping their accounts and data logically separated.

AWS describes several models:

A pooled model can be efficient because several customers use shared resources. A siloed model can provide greater separation where dedicated resources are needed. Hybrid models combine both approaches.

SaaS therefore does not require every customer’s data to sit in the same database or server.

What matters more is how the service is managed and delivered. A SaaS provider can still offer a centrally managed product while using different infrastructure arrangements for different customers.

Whatever model is used, tenant isolation is critical. Controls should prevent one customer from accessing another customer’s resources.

Why Do Businesses Use SaaS?

SaaS can offer several practical benefits.

Faster implementation. Many products can be activated quickly compared with building custom systems.

Lower infrastructure burden. Businesses generally do not need dedicated servers for every application.

Remote access. Authorised users can often access software wherever they have a suitable internet connection.

Centralised upgrades. Providers deploy updates without requiring customers to manage individual installations.

Scalability. Businesses can often increase users, storage or usage as they grow.

This can be particularly useful for smaller businesses that want access to professional software without building a large internal IT environment.

There are trade-offs. Businesses depend on the provider for uptime, security, support and product continuity, while subscription costs can increase as more tools are adopted.

Vendor lock-in can also become a concern if data is difficult to export or if important business processes become heavily dependent on one platform.

That is why businesses should consider long-term fit as well as short-term convenience.

What Is the Difference Between SaaS, PaaS and IaaS?

The main difference is how much of the technology stack the customer manages.

SaaS: The customer mainly uses a finished application.

PaaS: Developers use a managed platform to build or deploy applications.

IaaS: Businesses rent infrastructure such as computing, networking and storage while managing more of the software stack themselves.

Google Cloud describes SaaS, PaaS and IaaS as major cloud service models distinguished by how responsibilities are divided between the provider and customer.

A company using online accounting software is typically consuming SaaS. A developer building an application on a managed development environment may use PaaS. A technical team configuring its own virtual servers may be using IaaS.

Is SaaS the Same as Sales as a Service?

No. Software as a Service describes how software is delivered.

In B2B outsourcing contexts, sales as a service commonly refers to using an external provider for some or all sales functions. Unlike SaaS, however, the term is not a standardised cloud-computing category and its exact meaning can vary between providers.

A company could therefore operate a SaaS platform while separately using an outsourced sales provider for lead generation or sales support.

One describes software delivery. The other describes how sales capabilities may be provided.

What Should Singapore Businesses Check Before Choosing SaaS?

Businesses should consider more than price.

Look at integrations, security, data portability, support, scalability and what happens to company data when the subscription ends.

It is also worth asking whether the provider offers suitable access controls, multi-factor authentication, backups, audit logs and clear procedures for responding to security incidents.

Data Protection Is Especially Important

Singapore’s Personal Data Protection Commission states that when an organisation engages a cloud service provider to process personal data on its behalf, the organisation remains responsible for complying with applicable PDPA obligations.

Where a cloud provider processes personal data on behalf of and for the purposes of an organisation under a contract evidenced or made in writing, the provider is considered a data intermediary under the PDPA.

Businesses should also understand the provider’s security arrangements, sub-processors and data-processing locations.

Overseas Data Transfers

Where personal data is transferred overseas, Singapore’s Transfer Limitation Obligation requires organisations to ensure that the data receives a standard of protection comparable to that under the PDPA.

This does not mean overseas hosting is automatically prohibited. It means businesses need to understand how their provider handles international data transfers and whether the necessary protections are in place.

The PDPC also recommends a shared-responsibility approach to cloud security rather than treating security as entirely the provider’s responsibility.

What Is the Future of SaaS in Singapore?

SaaS is increasingly becoming part of a wider shift towards cloud-based, AI-enabled business software.

Instead of using completely separate tools for every task, organisations are increasingly working with connected platforms covering finance, communications, customer management, marketing and operations.

AI is adding another layer to this shift.

IMDA found that SME AI adoption rose from 4.2% in 2023 to 14.5% in 2024.

In an IMDA pulse survey of AI-using firms, 84% used off-the-shelf generative AI tools, making them the most commonly used AI category among surveyed AI users.

Singapore also launched the National AI Impact Programme in March 2026, with the aim of supporting 10,000 enterprises over three years as they deepen AI adoption.

For SaaS providers, this means AI features are increasingly being built directly into business applications, from writing assistance and analytics to customer support and workflow automation.

For customers, the more useful question may no longer be simply whether to move to the cloud, but which applications genuinely improve operations and justify their cost.

Understanding SaaS For Your Business

SaaS gives businesses access to sophisticated software without requiring them to operate the full application and infrastructure themselves.

From accounting and CRM systems to HR tools and SaaS marketplaces, the model has become a major part of how modern organisations use technology.

The right platform should make operations simpler rather than adding another subscription that nobody fully uses. Singapore businesses should compare functionality, integrations, security, data practices, scalability and long-term costs before choosing a provider.

Businesses looking for software providers and other professional services can also explore Listing.sg to discover companies across Singapore. For service providers, a Singapore business listing can help make the company easier to discover when potential customers are researching solutions.

Frequently Asked Questions About SaaS and What It Is

What Does SaaS Stand For?

SaaS stands for Software as a Service. It refers to software delivered online rather than installed and maintained entirely on the customer’s own infrastructure.

How Are SaaS Applications Hosted?

SaaS applications are commonly hosted on cloud infrastructure using computing, databases, storage and networking managed by the SaaS provider or its infrastructure provider.

What Is an Example of B2B SaaS?

A cloud CRM used by businesses to manage customers and sales pipelines is one example. Accounting, HR, payroll and project management platforms can also be B2B SaaS.

What Is the Difference Between SaaS and Cloud Computing?

Cloud computing is the broader delivery of computing resources over the internet. SaaS is one cloud service model in which customers use a finished software application.

Is SaaS Safe for Business Data?

SaaS can support strong security controls, but security depends on both the provider and how the customer configures the service. Businesses should review access controls, authentication, data handling, backups and regulatory requirements before choosing a platform.

Do Singapore Businesses Need to Consider the PDPA When Using SaaS?

Yes. Organisations may still have PDPA obligations when a SaaS or cloud provider processes personal data on their behalf, including requirements relating to protection and overseas data transfers. Businesses should understand how the provider stores, processes, transfers and protects personal data.