With the increasing trend in on-demand consumption, SaaS business model has started becoming the de-facto standard for delivering software products. While this is a great boon for ISVs to tap the SMB segment, SaaS business model also brings inherent challenges to the table. On a broader scale, all these challenges can be summed in two words – "Scalability" and "Profitability". ISVs that have understood and acted on these two challenges are the ones that are able to survive on the long run. In this white paper we will be discussing the challenges and solutions involved in building a "Scalable" and "Profitable" SaaS Business model.