SaaS (Software as a Service) is a model where software is hosted by the vendor in the cloud and used by the customer through a browser or app, in exchange for a subscription, instead of being installed on the customer's own machines.
For the customer, it removes installation, maintenance and updates, and makes it possible to get started fast. For the vendor, it creates recurring revenue and lets them ship improvements continuously to all customers at once. Slack, Salesforce, Notion and Zendesk are well-known examples.
SaaS differs from IaaS (renting infrastructure) and PaaS (renting a platform to deploy your own code). It places heavy demands on availability, data security and multi-customer management (multi-tenant).
Why it matters when hiring
A SaaS vendor hires people used to a product that runs continuously: frequent deployments, monitoring, backward compatibility, security. A developer coming from fixed-price project work will need to adapt. On the business side, SaaS roles have their own vocabulary (MRR, churn, expansion): an Account Manager or Customer Success Manager who does not master it has not truly worked in this model yet.