SaaS is software you open in a browser, pay for by the month or by the user, and do not install on a machine in the office. The vendor runs the servers, ships the upgrades, and keeps the lights on. You get an account. Your staff get a login. When you stop paying, you lose the login, and you had better have an export.
Why it is the usual starting point
Email, payroll, a simple shop, a help desk, video calls: these are solved problems. Buying them as SaaS is how a small team stays small. You do not hire someone to patch a mail server. You do not wait a year for a version of invoicing that a hundred other firms already use. The speed is the product. The trade is that you work the way the product works. Their fields. Their reports. Their idea of a customer.
That trade is fine when the job is ordinary. It turns sour when the way you bill, stock, or schedule is the reason customers stay, and the product cannot say it. Then every exception becomes a spreadsheet beside the login. The subscription is cheap. The spreadsheet is the real system.
SaaS is not the same as "hosted"
A system built for you and running on a rented server is not SaaS in the sense vendors mean, even if you pay a monthly fee for us to keep it. You are not sharing a product with a thousand other firms. You own the shape of it. Leaving is a copy of your database, not a prayer that the export includes the fields you actually use. Do not let the word "cloud" collapse those two deals into one.
The decision is written up in custom software versus off-the-shelf. Commodity work stays on a subscription. The operational middle, if it is yours, does not.
When it matters on a project
Ask it at the start, not after a custom build has copied a product you could have rented. If the team can change the form to match the tool, buy the tool. If they have already spent years routing around it, a website or a portal that only puts a pretty face on the same mismatch will not save the month. Write down what happens to the data if you leave. A SaaS deal without an export you have tried is a rental with the door locked from the outside.