A good way to understand the SaaS model is by thinking of a bank, which protects the privacy of each customer while providing service that is reliable and secure—on a massive scale. A bank’s customers all use the same financial systems and technology without worrying about anyone accessing their personal information without authorization.
A “bank” meets the key characteristics of the SaaS model:
A multi-tenant architecture, in which all users and applications share a single, common infrastructure and code base that is centrally maintained. Because SaaS vendor clients are all on the same infrastructure and code base, vendors can innovate more quickly and save the valuable development time previously spent on maintaining numerous versions of outdated code.
The ability for each user to easily customize applications to fit their business processes without affecting the common infrastructure. Because of the way SaaS is architecture, these customization are unique to each company or user and are always preserved through upgrades. That means SaaS providers can make upgrades more often, with less customer risk and much lower adoption cost.