In the current rapid digital environment, enterprises possess an unprecedented array of choices for software deployment and utilization. Two predominant software delivery models are prevalent: SaaS (Software as a Service) and SAAP (Software as a Product). Although both play essential roles in business technology, they possess unique characteristics, advantages, and drawbacks.
We will examine SaaS and SAAP, their advantages and disadvantages, and provide real-world examples to assist you in selecting the appropriate model for your enterprise.
What is SaaS (Software as a Service)?
SaaS is a cloud-based software delivery model where users access applications over the internet via a subscription. Instead of buying and installing software on individual devices, users log in through a web browser and use the software on-demand.
✅ Examples of SaaS:
- Google Workspace (Gmail, Docs, Sheets)
- Microsoft 365
- Salesforce
- Shopify
- Slack
- Dropbox
What is SAAP (Software as a Product)?
SAAP refers to software sold as a one-time purchase and installed locally on a user’s device. This traditional model gives users ownership of the software without recurring subscription fees. However, updates and support may be limited or come at additional cost.
✅ Examples of SAAP:
- Microsoft Office 2016 (standalone version)
- Adobe Photoshop CS6
- AutoCAD (legacy versions with perpetual licenses)
- The Sims 4 (base game purchase)
- WinRAR (licensed version)
Key Differences Between SaaS and SAAP
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Feature
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SaaS
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SAAP
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|---|---|---|
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Payment Model
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Subscription-based (monthly/yearly)
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One-time license fee
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Hosting
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Cloud-hosted
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Locally installed
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Accessibility
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Anywhere with internet
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Only on installed devices
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Updates
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Automatic and frequent
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Manual or paid upgrades
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Support
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Included in subscription
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Often limited or add-on
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Scalability
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Highly scalable
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Limited to purchased version
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Ownership
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Access-based
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Permanent ownership
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Advantages of SaaS
- Lower Upfront Cost : SaaS eliminates the need for large upfront investments, making it ideal for startups and small businesses.
- Easy Accessibility : Users can access SaaS applications from any device with an internet connection, enhancing remote work flexibility.
- Automatic Updates : Updates are managed by the provider, ensuring the latest features, security patches, and compliance standards.
- Scalability : Businesses can scale their usage up or down based on changing needs without infrastructure headaches.
- Integrated Support and Maintenance : Support is often bundled in the subscription, reducing IT overhead.
Disadvantages of SaaS
- Ongoing Costs : Over time, subscription fees may add up, potentially exceeding the cost of a one-time product.
- Internet Dependency : SaaS relies on a stable internet connection, which may be a limitation in certain regions or industries.
- Limited Customization : Some SaaS platforms offer limited flexibility compared to custom-built or locally-installed solutions.
Advantages of SAAP
- One-Time Payment : SAAP products often have a lower total cost of ownership over time.
- No Internet Required : These applications can function offline, making them ideal for remote locations or standalone machines.
- Full Control : Users maintain control over updates and custom configurations.
- Long-Term Ownership : Once purchased, users can keep and use the software indefinitely without additional fees.
Disadvantages of SAAP
- Manual Updates : Users are responsible for installing updates, which may be infrequent or require a separate purchase.
- Higher Initial Cost : Licensing fees can be costly upfront, especially for enterprise software.
- Limited Support :Â Support is often time-bound or must be purchased separately after a certain period.
- Scalability Issues : Scaling SAAP solutions often means buying more licenses or performing complex upgrades.
SaaS Examples
Microsoft 365:
What it is:
Microsoft 365 is a cloud-based suite of productivity tools that includes Word, Excel, PowerPoint, Outlook, Teams, and more.
How it works:
Users pay a monthly or annual subscription to access the suite via the cloud. Files are stored in OneDrive, and all apps are kept up to date automatically.
Use Case:
- Ideal for remote teams who need to collaborate on documents in real time.
- Suits organizations that want scalable pricing and cloud backups.
Why it’s SaaS:
- Subscription-based pricing
- Hosted in the cloud
- Includes automatic updates and support
- Accessible from any device
Business Value:
- Saves on infrastructure costs
- Ensures consistent productivity tools across teams
- Supports remote and hybrid workforces
Shopify
What it is:
Shopify is a cloud-based eCommerce platform that allows businesses to create and manage online stores.
How it works:
Merchants pay a monthly fee to access the platform, which includes hosting, security, shopping cart features, and third-party app integrations.
Use Case:
- Perfect for businesses launching an online store quickly without technical complexity.
- Used by both small entrepreneurs and large retail brands.
Why it’s SaaS:
- Subscription model
- Hosted entirely in the cloud
- Comes with updates, security patches, and integrated features
- Scalable depending on business size
Business Value:
- Fast time to market
- Minimal technical maintenance
- Easily integrates with payment gateways and inventory systems
SaaP Examples
AutoCAD (Perpetual License)
What it is:
AutoCAD is a professional design and drafting software used by architects and engineers. Before moving to a subscription model, Autodesk sold perpetual licenses for AutoCAD.
How it works:
Customers bought a one-time license, installed the software locally, and used it indefinitely without recurring payments.
Use Case:
- Ideal for long-term infrastructure or government projects with restricted budgets and strict offline requirements.
Why it’s SAAP:
- One-time cost
- Fully offline functionality
- Users retain full control over files and installation
Business Value:
- Cost-efficient for long-term, large-scale projects
- Works well in secure or disconnected environments
- No unexpected price increases due to subscription changes
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Adobe Photoshop CS6
What it is:
Adobe Photoshop CS6 is a desktop-based photo editing software sold before Adobe shifted to its Creative Cloud (SaaS) model.
How it works:
Users purchase a license once and install the software on their local machine. There are no ongoing subscription fees.
Use Case:
- Suitable for freelancers or small studios that don’t need the latest features or cloud-based collaboration.
- Useful in environments where internet access is limited or restricted.
Why it’s SAAP:
- One-time purchase
- Installed and run locally
- No automatic updates
- You own the software indefinitely
Business Value:
- Lower long-term cost for infrequent users
- Full control over the version and installation
- Can operate entirely offline, offering independence from cloud services
Industry-Specific Examples of SaaS and SAAP
SaaS Example: Practice Fusion
- Use Case: Cloud-based Electronic Health Record (EHR) software.
- Why SaaS: Doctors access records from any device securely; data is automatically backed up and updated.
- Business Value: HIPAA-compliant, remote accessibility, and minimal IT management.
SAAP Example: Medisoft (older versions)
- Use Case: Medical billing and practice management installed on local machines.
- Why SAAP: Fully offline, secure, and independent from cloud servers.
- Business Value: Reliable in clinics with strict security rules or limited internet access.
SaaS Example: QuickBooks Online
- Use Case: Cloud-based accounting and bookkeeping software for businesses.
- Why SaaS: Access from anywhere, integrates with bank feeds, and automatic updates.
- Business Value: Real-time collaboration with accountants and scalable pricing.
SAAP Example: Tally ERP 9 (Desktop Edition
- Use Case: Accounting software for Indian businesses, installed on local PCs.
- Why SAAP: Used without internet, maintains strict data privacy, and works with local compliance standards.
- Business Value: Suitable for SMEs in areas with unreliable internet or tight data control needs.
SaaS Example: Google Classroom
- Use Case: Cloud-based learning management system (LMS) for schools.
- Why SaaS: Teachers and students access materials from anywhere, collaboration and grading in real time.
- Business Value: Improves distance learning, easy to manage, and low cost for institutions.
SAAP Example: Moodle (On-premise Deployment)
- Use Case: Self-hosted learning management platform.
- Why SAAP: Installed on local school servers with full administrative control.
- Business Value: Customizable, no dependency on third-party cloud services, data stored locally.
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SaaS Example: BigCommerce
- Use Case: Fully managed eCommerce SaaS platform.
- Why SaaS: Instant deployment, integrations with payment gateways, SEO tools built-in.
- Business Value: No need for technical setup, automatic updates, and flexible pricing.
SAAP Example: PrestaShop (Self-hosted)
- Use Case: Open-source eCommerce platform installed on your own server.
- Why SAAP: Offers full control over customization and data ownership.
- Business Value: Ideal for businesses that want to avoid recurring fees and retain full autonomy.
Final Takeaway
Whether you choose SaaS or SAAP depends on your industry needs, infrastructure, compliance regulations, and growth strategy. SaaS is leading the charge in scalability and convenience, while SAAP still offers unmatched control in niche or security-sensitive environments.
