MSDEVBUILD / azure

SaaS – Software as a Service

Your data
Application
Runtime
Operating system
Virtualisation
Servers and storage
Networking
Datacenter

You manageMicrosoft manages
In SaaS, Microsoft runs the whole app. You only look after your data and users.

😟 THE PROBLEM

A charity needs email and video calls by next week and has no IT staff.

😊 THE SOLUTION

Subscribe to SaaS: ready-to-use software, nothing to install or maintain.

  • No servers or IT team✓ The provider runs everything
  • Needed immediately✓ Sign up and start using it today
  • Software goes out of date✓ Updates arrive automatically
🛠️ Solved with: Microsoft 365
Module 1: Cloud Concepts ⏱ 7 min read Updated 11 Nov 2026

Quick answer

Software as a Service (SaaS) is the cloud service type where you use a complete, ready-made application over the internet, usually by subscription. The provider runs everything: infrastructure, platform, application, updates. You just sign in and use it, and you remain responsible for your data, users, devices and access settings. Microsoft 365, Outlook.com and Dynamics 365 are examples.

Exam objective: 1.3.3 Describe software as a service (SaaS). (Skills measured as of July 20, 2026)

Start with a question

When you send an email, do you ever think about the mail server?

You open Outlook or Gmail, type, press send. You never installed a mail server, never patched one, never bought a disk to store your messages. Someone else does all of that.

That everyday experience is Software as a Service, the most complete form of cloud.

Explain it like I’m 10

The technical explanation

With Software as a Service, the provider hosts and manages the entire application stack: datacenter, hardware, OS, runtime, the application itself, and its updates. Customers access it through a browser or app, usually paying a subscription per user or per month.

What you can still do is configure: create users, set permissions, choose security policies, adjust workflows and integrate through APIs. What you cannot do is change the vendor’s code or infrastructure.

You manageThe provider manages
Your data (what you store, classify and share)The application and its updates
User accounts and identitiesRuntime, OS, middleware
Devices that access the serviceServers, storage, networking
Access policies (for example MFA, sharing settings)Datacenter and physical security

Examples

  • Microsoft 365: Outlook, Teams, Word, Excel, SharePoint, OneDrive.
  • Dynamics 365: CRM and ERP business applications.
  • Many others from different vendors: online accounting, HR systems, ticketing tools, video conferencing.

Real-world business scenario

Healthcare

A chain of dental clinics

The problem
Each clinic ran its own email server and file share in a back office. Backups were unreliable and staff could not work from home.
What they used
Microsoft 365 for email, Teams and file sharing, with multifactor authentication and conditional access policies.
Why that choice
No servers to maintain, always up to date, accessible from anywhere, and predictable per-user cost.
The result
Back-office servers were retired, staff collaborate across clinics, and IT time moved from fixing servers to helping people.

When to use it and when not to

✓ Use it when…

  • The need is common across businesses: email, collaboration, CRM, HR, accounting.
  • You want something working immediately with no maintenance.
  • You prefer predictable per-user subscription costs.
  • Users need access from anywhere, on any device.

✕ Think twice when…

  • The process is your competitive advantage and needs deep, unique customisation.
  • Strict data residency rules the vendor cannot meet.
  • Integration needs that the vendor APIs cannot support.

↔ Alternatives to consider

  • **PaaS** to build a custom application when no product fits.
  • **Extend SaaS** with low-code tools or custom PaaS components integrated by API.
Ready for more?The full lesson adds the technical explanation, when to use it, interview questions and revision notes.

Interview preparation

Say your answer out loud first, then open the model answer. Interviewers care more about your reasoning than the exact words.

Beginner What is SaaS? Give two examples.

Model answer

SaaS is software you use over the internet without installing or managing it. The provider runs and updates everything. Examples are Microsoft 365 (Outlook, Teams, Word online) and Dynamics 365. Many consumer apps like web email are also SaaS.

Interviewer follows up

If Microsoft runs everything, what is the customer responsible for?

You

The customer is still responsible for its data, the user accounts and who has access, the devices people use, and settings like multifactor authentication and sharing policies. Most SaaS security incidents come from weak passwords or over-sharing, not from the provider's infrastructure.

Intermediate What are the disadvantages of SaaS?

Model answer

Limited customisation (you work within the vendor's features), dependency on the vendor's roadmap and availability, data stored in the vendor's systems (check residency and export options), subscription costs that grow with users, and integration constraints set by the vendor's APIs.

Experienced developer The business wants to build a custom CRM. How do you decide between building on PaaS and buying SaaS?

Model answer

I would ask whether the CRM is a source of competitive advantage. If our sales process is standard, buy SaaS (for example Dynamics 365) and configure it. That is faster, cheaper to run and continuously updated. Build only the parts that truly differentiate us, perhaps as extensions on PaaS integrated through APIs. I would also weigh data residency, integration needs, total cost per user over five years, and exit strategy (data export).

Scenario A 20-person charity needs email, calendars, file sharing and video calls next week with no IT staff. What do you recommend?

Model answer

A SaaS productivity suite such as Microsoft 365. Nothing to install or maintain, available immediately, predictable per-user pricing. Turn on MFA for every account from day one.

Test yourself with exercises

4 original practice questions in the AZ-900 style. Pick your answers, then check them. You will see why each option is right or wrong. Score 75% or more and this topic is marked complete.

Question 1

Question 1 of 4

Microsoft 365 is an example of which cloud service type?

Question 2

Question 2 of 4

Which cloud service type requires the least management effort from the customer?

Question 3

Question 3 of 4 · Select 2

In a SaaS solution, which TWO remain the customer's responsibility?

Question 4

Question 4 of 4

A small company wants email and video meetings for all staff by next week. It has no IT team.

Which approach is most appropriate?

Quick revision

Key points

  • SaaS = complete application delivered over the internet; provider manages almost everything.
  • Least control and least management effort of the three service types.
  • Usually subscription-based, per user or per month.
  • You still own your data, accounts, identities and devices.
  • Microsoft examples include Microsoft 365, Dynamics 365 and Outlook.com.

Important terminology

SaaS
Software as a Service. A finished application delivered over the internet, fully run by the provider.
Subscription licensing
Paying per user or per month for software instead of buying perpetual licences.
Configuration vs customisation
SaaS lets you configure settings and workflows, but you cannot change the vendor's underlying code.

Common mistakes

  • Thinking the customer has no security responsibility in SaaS.
  • Calling Azure itself SaaS. Azure is a platform offering IaaS, PaaS and serverless services.

Exam tips

  • "Users only need to sign in and use the software" = SaaS.
  • "Email, office apps, CRM delivered over the internet" = SaaS.

Five quick revision questions

  1. 1.What does SaaS stand for?Show

    Software as a Service.

  2. 2.Give a Microsoft SaaS example.Show

    Microsoft 365 (also Dynamics 365, Outlook.com).

  3. 3.Which service type has the least customer management effort?Show

    SaaS.

  4. 4.In SaaS, who is responsible for user accounts and data?Show

    The customer.

  5. 5.What is a typical SaaS pricing model?Show

    Subscription, often per user per month.

Official references

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Next up: Choosing IaaS, PaaS or SaaS