What are SaaS Types?

A software as a service (SaaS) type is a cloud-based delivery and licensing model where software is hosted by a service provider and offered to users via the Internet. SaaS itself is one of the three cloud service models in NIST’s definition of cloud computing (SP 800-145), besides PaaS and IaaS. There are several SaaS types, each one designed to match different requirements.

SaaS types differ in:

• Market size
• Development team size
• Resources scope
• Software focus level
• Audience type
• Business model

Understanding business goals and requirements is essential to choosing the right SaaS offering type.

SaaS solutions come in different forms:

• Horizontal SaaS: This is a general-scope cloud-based technology catering to the needs of different industries. Some examples are project collaboration tools or CRMs (customer relationship management software).
• Vertical SaaS: This SaaS type responds to niche requirements specific to a particular domain or sector. Examples include a dental clinic appointment management system.
• SMB SaaS: These are SaaS tools developed for small and medium-sized businesses with a focus on usability and affordability.
• Micro-SaaS: This SaaS delivery model has a definite feature set run by a small team or solo-preneur.
• White-label SaaS: This is software created by a developer to be resold to and rebranded by other organizations.
• Open-source SaaS: This represents publicly accessible software that can be shared and modified.
• Enterprise SaaS: This is software designed to meet the requirements of large companies.

By function, common SaaS products include CRM, office productivity, email and communication, accounting, and HR software.

The main differences between micro-SaaS and traditional SaaS are categorized as follows:

• Application Scope: While traditional SaaS offers a wider set of features, micro-SaaS prioritizes specific requirements and delivers niche software.
• Product development: Creating traditional SaaS involves greater costs and IT teams, whereas micro-SaaS is built by individual developers or small teams.
• Sales and marketing: Micro-SaaS is usually bootstrapped by indie developers and small teams, so it relies more on growth hacking and communities.

To determine if vertical SaaS would be an appropriate model for your business and product idea, answer the following questions:

• Does your industry perform specialized operations and is it subject to strict compliance standards?
• Do mass-produced horizontal SaaS tools answer your requirements?
• Would you be willing to pay a higher price for a tailored solution?
• Do you have extensive industry-relevant knowledge to build a vertical SaaS platform?

To target SMBs (small and medium-sized businesses), it’s important to highlight the affordability and ease of use of your SaaS product. Startups and small teams have limited resources, which is why they will seek budget-friendly solutions.

Additionally, you should determine the core requirements of your target audience and emphasize how your offering answers them.