SaaS vs. Cloud Computing

Software as a Service (SaaS) and cloud computing are often confused. Indeed, these terms are closely related, but they actually describe different concepts. For example, services provided by software vendors can fall under the categories of both SaaS and cloud-based solutions. But at the same time, a SaaS app can be cloud-based, but cloud-based services are not always related to the SaaS model.

Confusing, isn’t it? In fact, there is nothing difficult if you understand these terms. In short, SaaS is a component of Cloud Computing. But considering various models to run your business, you will also come across such service models as hosted software, public and private clouds, IaaS, and PaaS. So, it’s crucial to know the differences between them before moving to the cloud. And first, let’s get a clear understanding of a broader concept.

This is a collective term that describes delivering cloud services over the internet. Technology allows users to access and use remote servers, software applications, data storage, and networking without owning and managing physical hardware and software infrastructure.

Some well-known examples of cloud computing you surely use daily include Amazon Web Services (AWS), Adobe Creative Cloud, Microsoft Azure, Google Cloud Platform (GCP), IBM Cloud, Salesforce, and Oracle Cloud. These industry giants, with a wide range of services for both businesses and individuals, have become the standard for storing, managing and securing data.

Related reading: Cloud Computing in Banking

• Public cloud. A third-party provider owns and operates this cloud infrastructure, making it accessible to users through an internet connection. Public cloud services include a wide range of use cases, from hosting websites and applications to data storage and analytics. They provide scalability, cost-efficiency, and ease of use.
• Private cloud. This cloud computing environment is dedicated to a single organization with specific data security and compliance needs. It can be hosted on the organization’s premises or by a cloud service provider. Private cloud users have much control over the infrastructure, including hardware, networking, and software configurations.
• Hybrid cloud. Within this approach, which combines elements of both previous ones, data and applications can seamlessly move between the private and public cloud components. It allows users to benefit from both deployment models while addressing specific business needs.

• IaaS, or Infrastructure as a Service, provides essential compute, storage, and networking resources. 
• PaaS, or Platform as a Service, offers developers a platform and environment to build, deploy, and manage apps.
• SaaS, or Software as a Service, delivers software solutions over the internet on a subscription basis.

Cloud computing offers many opportunities to streamline business processes, such as resource pooling, on-demand self-service, broad network access, rapid elasticity, etc. Control over applications and a pay-as-you-go model enable organizations to optimize costs by easily adjusting resource allocation according to their specific needs. Furthermore, cloud software benefits include more flexibility, reliability, security, and increased performance.

Still, there are certain downsides associated with this technology.

• The reliability of computing services depends on the provider’s infrastructure.
• Cloud-based software requires a strong and reliable internet connection for optimal usage.
• Switching cloud providers or migrating data and applications can be complex and costly.
• Storing data in the cloud may raise security and privacy concerns.

Considering cloud adoption, you should carefully evaluate the specific needs, risks, and objectives of your business. With a proper plan, strong security measures, and the right cloud provider, you will develop a successful strategy and avoid any potential problems.

Software as a Service is a subset of cloud computing and the most well-known service model. However, not all SaaS solutions are cloud-based, as they can also be hosted on private servers or on-premises infrastructure. Similarly to IaaS and PaaS, SaaS applications are managed by cloud providers, available from anywhere via the internet, and subscription-based.

Well-known SaaS examples across various categories and industries include Microsoft 365 apps, the Salesforce CRM platform, the Asana tool for project and task management, Workday solutions, Freshdesk customer support software, Slack messaging app, and others.

Related reading: What is SaaS Application

Since SaaS is a software delivery model included in the broader concept, its pros overlap with some of the benefits of cloud computing, but they are not exactly the same. Cost-effectiveness, scalability, on-demand network access, and automatic updates are common advantages between them. However, SaaS benefits are specific to the delivery of software applications over the internet.

• Reduced maintenance. SaaS providers handle most maintenance tasks, allowing clients to focus on the software application usage rather than managing it.

• Wide range of applications. SaaS covers an extensive variety of apps, including office productivity tools, organizational software, project management solutions, CRM platforms, and other examples. SaaS software aims to meet business needs and enhance operational efficiency.
• Rapid deployment. SaaS applications are typically user-friendly and easy to deploy. They are accessible to a broad spectrum of users who can get up and running with minimal setup time.
• Pay-as-You-Go pricing. The SaaS business model offers subscription-based pricing, enabling users to pay for only the features and services they need.

Some common disadvantages of Software as a Service include dependence on internet connectivity, potential security concerns, lack of control, compliance challenges, and vendor lock-in.

Cloud computing is a broad term that encompasses various service models, while SaaS is a specific one within it, along with PaaS and IaaS. And the main distinctions between them are based on the fact that the SaaS primary service is the delivery of specific software applications, whereas cloud computing provides different types of services and capabilities due to the multiple delivery models included in it.

For instance, SaaS providers manage and maintain the software applications and underlying infrastructure, ensuring timely updates, security and availability. In cloud computing, management responsibilities depend on the specific service model: in IaaS, users manage apps, data, runtime, and middleware, and in PaaS, they are responsible only for applications, databases and their protection.

Applications that run on SaaS provider’s servers typically have limited customization options for users. Cloud computing provides businesses with more flexibility to customize resources according to their unique requirements.

SaaS-based products are commonly offered through subscription licensing, with clients paying regular monthly or annual fees for each user or software application. Cloud computing operates on a pay-per-use model. In other words, customers pay only for the computing resources they use.

Now that we’ve covered the major differences between SaaS and cloud computing, you should not have any problems with these terms next time. By understanding this distinction and considering the specific needs and requirements of your company, you can decide which one is right for you.

Both cloud computing and the SaaS model are popular solutions for businesses aiming to enhance their IT infrastructure, save costs, and boost efficiency. However, choosing the right provider is no less important for the further success of your project. Technologies are continually evolving, and staying informed about emerging trends and advancements in cloud computing and SaaS can help you stay competitive and agile in an ever-changing business landscape.