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AI & SaaS Glossary

90 key AI, machine learning, and SaaS terms explained in plain language.

C

CAC

CAC (Customer Acquisition Cost) is the average total cost a business spends to acquire one new customer.

CDN

A CDN (Content Delivery Network) is a network of edge nodes spread across the globe that serves static content — images, video, scripts — and even dynamic requests from locations near the user, reducing latency, offloading origin servers, and improving availability.

Chain of Thought

Chain of Thought is a technique that lets AI models show their step-by-step reasoning before giving a final answer, much like how humans list their thinking steps when solving a problem.

Churn Rate

Churn rate is the percentage of customers who stop using a product or service over a given period.

CI/CD

CI/CD is a software development approach that helps teams release software updates more frequently and reliably by automating the build, test, and deployment processes.

Computer Vision

Computer vision is the technology that enables computers to 'see' and understand image and video content the way humans do.

Context Window

A context window is the maximum length of conversation or text that an AI model (such as a chatbot) can consider and remember at once when generating a response.

Conversion Rate

Conversion rate is the percentage of visitors who complete a specific goal action, such as making a purchase, signing up, or clicking. It measures how effectively marketing or user experience turns visitors into customers or users.

Caching

Caching stores the result of a computation or request close to where it will be used so identical future requests can reuse it. On the web, caches exist at the browser, CDN edge, reverse proxy, application, and database layers — making it the highest-leverage performance optimization available.

M

Marketplace

A marketplace is an online platform that centrally showcases and sells a variety of software, services, or digital products, where users can browse, purchase, and integrate different tools or applications.

MCP

MCP (Model Context Protocol) is an open protocol initiated by Anthropic that standardizes how AI applications connect to external tools and data sources. Think of it as a USB port for AI: any MCP server can expose databases, ticketing systems, file systems, or internal APIs to MCP-capable AI clients in a uniform way.

Microservices

Microservices is a software architecture style that breaks a large, complex application into a series of small, independent services, each focused on a specific business function and communicating with one another through network interfaces (usually APIs).

Monorepo

A Monorepo (single repository) is a software development strategy in which the code for multiple related projects or services is kept in one version control repository.

MRR

MRR (Monthly Recurring Revenue) is the total predictable income a subscription-based SaaS company reliably receives each month from all of its active customers.

Multi-modal

Multi-modal refers to AI systems capable of processing and integrating multiple types of information inputs at the same time, such as text, images, audio, and video.

MVP

An MVP (Minimum Viable Product) is the leanest initial version of a product, containing only its most essential features, built to quickly validate market assumptions and gather user feedback.

R

RAG

RAG (Retrieval-Augmented Generation) is a technique that enables AI models to look up and cite up-to-date, accurate information from external knowledge bases when answering questions.

Reinforcement Learning

Reinforcement learning is a method that lets AI learn through trial and error, much like training a pet: rewards for doing things right, penalties for doing them wrong, until it learns to complete a specific task.

REST API

A REST API is a standard way for different software systems to communicate over the internet, using common web requests (such as retrieving, creating, updating, or deleting data) to exchange information.

Retention Rate

Retention rate is the percentage of users or customers who continue to use a product or service over a specific period of time, indicating how well a business keeps its audience engaged.

RLHF

RLHF (Reinforcement Learning from Human Feedback) is a method for training AI models that collects human preference feedback on model outputs to guide the model toward generating responses that better align with human values and expectations.

Reverse Proxy

A reverse proxy is an intermediary deployed on the server side: client requests hit the proxy first, which forwards them to backend services and returns the responses. Clients only ever see the proxy's address; the backend architecture stays completely hidden. Nginx, Caddy, HAProxy, and most cloud load balancers are reverse proxies.

Rate Limiting

Rate limiting protects services by capping the number of requests allowed in a time window: excess requests are rejected or queued. It prevents traffic spikes from overwhelming a system, and also powers anti-abuse and API metering. In high-availability design it is the core trade of sacrificing some requests to keep the whole service up.