SaaS Vs. Cloud: What’s the Difference?

Updated Jan 2, 2023.
SaaS Vs. Cloud

Software as a Service (SaaS) and cloud are common services business owners come across when selecting the best service suitable for their business models.

These technologies or services might be SaaS-based, cloud-based, IaaS-based, or PaaS-based products and services.

Considering how often you come across them, you might think they are the same, whereas they are not. Even within each term, there are differences in subcategories. For example, B2B SaaS is different from B2C SaaS.

This article will provide a comprehensive insight into SaaS and cloud computing, spelling out their differences and benefits so you can be abreast of their distinctions while interacting with them in your everyday internet activities.

Let’s get started.

What is Cloud Computing?

Cloud computing, also known as cloud-based software, is a technology you can access remotely regardless of your location through the cloud (internet). They include SaaS-based applications, IaaS-based and PaaS-based systems.

You employ cloud computing whenever you need to use the internet connection to access products and services.

In simple terms, you only need a compatible device and a good internet connection (internet browser and Wi-Fi) to access virtually anything in the cloud.

Cloud computing helps you quickly access, store, and share data and information through the internet.

In addition, the cloud infrastructure enables the storage of many servers, databases, and networking available in the cloud, owing to technological advancements.

Categories of Cloud Computing

Cloud computing has three categories.

1. Public Cloud

Public cloud is a category of cloud computing available over the internet, with many users like organizations and companies accessing it.

This category is an IT deployment model where various activities, such as infrastructures and computing hardware, are managed by cloud-based services and made available for all internet users.

They may offer cloud computing services like Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) which may help in enterprise resource planning (ERP).

The public cloud gives unlimited access to many end users surfing the internet. A public cloud provider is solely responsible for maintaining and managing the public server.

Multiple users can access the same information simultaneously without being restricted from using the various data centers.

Since it is open to the public and there are high chances of theft and cybercrimes, public cloud providers use Intrusion Detection and Prevention Systems (IDPs) to detect data intrusions and other illegal activities.

Public Cloud
Source: PhoenixNAP

2. Private Cloud

The difference between private and public clouds is who manages the cloud. Public clouds are managed by cloud providers, while private clouds offer more control to users.

A private cloud is a cloud environment hosted on private servers and managed by the end users.

The benefits of a private cloud include elasticity, scalability, effectiveness, and self-service. Public clouds have more proficient security measures through firewalls and private hosting to protect sensitive data and avoid data loss.

However, the private cloud requires access management, maintenance of resources, onboarding, and infrastructure management, which will incur many expenses just like traditional software does.

3. Hybrid Cloud

A hybrid cloud is a cloud computing category that integrates private and public clouds. Application software tools are allowed to run smoothly on the combined platforms.

You can continue enjoying on-premises software and using the public cloud simultaneously with hybrid cloud solutions. A hybrid cloud is a form of mixed computing that provides a unified platform with enhanced possibilities.

Hybrid Cloud vs. Multi-cloud operations
Source: Spiceworks

Cloud Computing Vs. Traditional IT

There are a series of distinctions between cloud computing and traditional IT. These distinctions range from their pros and cons, plus other factors.

1. Installation Process

During the era of traditional IT, businesses or companies normally used their servers and on-premise hardware to access an application service provider.

You usually need to install a hard drive on the user's computer system, unlike cloud computing, where you can access the internet without needing to install hard drives.

2. Maintenance

Hardware maintenance can be costly and time-consuming, limiting software users since it requires local installation.

The intervention of cloud computing has enhanced the management of many modern businesses since owning hardware, and operating system software is no longer a requirement to access the cloud (internet).

Users do not require special training to maintain, launch, and access their software.

Cloud Computing Services - Who Manages What
Source: IBM

3. Cost Effective

Traditional IT is more expensive compared to cloud computing solutions. Cloud computing solutions help cut costs by reducing physical human resources, ensuring remote interaction and engagement, and sharing data between colleagues.

4. Accessibility

Cloud computing is more accessible compared to traditional IT solutions. Individual team members can use the cloud services irrespective of location with a stable internet connection and browsers.

Cloud Software Benefits and their Examples

With cloud computing, you do not have to worry about data analytics safety, setup, and maintenance of your various software applications.

1. Faster Data Synchronization and Storage

Cloud applications enable team members to collaborate and share real-time updates. Business emails, work files, and data can be dealt with remotely without needing everyone to meet or converge physically.

Team members can use the cloud-based platform to view and share information securely. Some use online collaboration tools to collaborate with other team members and stakeholders, thereby improving management and business profits.

However, you can do virtual collaboration and interaction without cloud computing software, but it will not be as fast, engaging, easy, and effective as using cloud-based software.

2. Simple Installation Process

Since everything is available in the cloud, you do not need hardware components. Every activity can happen simultaneously and virtually.

The responsibility of the third-party service provider is to ensure the smooth running of the platform and every other intervention since the cloud is always hosted most of the time. It is unlikely you will encounter network downtime from the host or cloud.

3. Cost Saving

You spend excessive amounts to store or manage your organization’s data without cloud services. Cloud computing will help store, process, and analyze every activity in real-time at a lower cost than traditional IT solutions.

The Return On Investment (ROI) generated from using cloud-based software is high compared to the total cost implication of switching from traditional IT to cloud computing.

Many cloud providers offer some services or features for free. In addition, the cloud-based software pay-as-you-go system allows free access to features and free storage space.

Users can take up enough space on the cloud without paying a fortune. You will only need to pay for renting space on the cloud.

4. Data Security and Prevention of Outages

Data privacy is one of the chief concerns of individuals and companies using the cloud. One of the responsibilities of cloud providers is to monitor data security to prevent it from getting into the wrong hands.

The cloud security system is more reliable and efficient when compared to the former ways of securing data using traditional IT processes.

If there is data theft, usually caused by the employees, sensitive data is to be kept offsite to protect their integrity. Companies experience improved data security through encryption and other security measures using cloud-based computing.

Data Security and Privacy in Clouds
Source: Cuelogic

5. Flexibility

Cloud computing helps you increase focus on your business. You can not be dealing with computers and storage issues, plus focusing on your business simultaneously.

With cloud software, you outsource your company’s IT infrastructure and host, freeing up enough time to focus on your business.

In addition, flexibility on the cloud is better than that of the local server. Cloud-based servers can provide additional bandwidth to meet your demand. Traditional IT requires you to use a local server which is quite expensive and complex to run and manage.

Examples of Cloud Computing Service Providers

Here are the top cloud service providers suitable for all types of businesses.

  • Amazon Web Services (AWS)
  • Microsoft Azure
  • Google Cloud
  • IBM Cloud
  • Oracle Cloud
  • Alibaba Cloud

What is Software as a Service (SaaS)?

Software as a Service, also called SaaS, is a cloud delivery model that enables the licensure of cloud-based software to users.

You can access the software application virtually via the internet, which means the user does not do the installation and maintenance of the software.

Since the application runs on the SaaS provider’s servers, they are saddled with the responsibility of securing, maintaining, and enhancing the performance of the software.

You can only be granted access to SaaS by subscription. The subscription is based on a monthly fee or pay-per-use, which depends on the number of SaaS customers and the quality of service.

On-site, IaaS, PaaS, SaaS comparison
Source: Red Hat

SaaS service providers ensure the maintenance and delivery of the application for your use. Software as a Service (SaaS) applications is not only used by many end users but also by large companies.

Due to SaaS products' cost-effectiveness, it is now widely used for business processes such as project management, customer relationship management (CRM), and sales.

There are 3 cloud types under Software as a Service: public cloud, private cloud, and hybrid cloud.

Before choosing a third-party provider for your business needs, check out these essential SaaS features.

  • Multi-Tenancy Model
  • Subscription-Based Billing
  • Automated Provisioning
  • High Availability
  • Elastic Infrastructure
  • Single Sign-On
  • Data and Application Security

SaaS Benefits and Examples

With the aid of SaaS providers, large companies can optimize, manage and store their data on an online platform for easy accessibility to every user that needs the service.

1. Cost Effectiveness and Efficiency

Since SaaS applications are available, you do not need the services of a group of IT members to cater to the platform's maintenance, thereby paving the way to overall efficiency.

Businesses enjoy cost reduction. They do not need to spend much on maintenance tools as everything is available on the SaaS cloud.

2. Mobility and Virtual Presence

With the use of smartphones, PC, or desktop computers, SaaS vendors provide access to various data and information. Regardless of your location, you can always have full access to it being left out.

A SaaS application vendor manages and enhances the virtual presence of team members, especially long-distance workers.

3. Data Recovery

Software vendors ensure data backup immediately after they are stored to ensure seamless recovery when lost. As a result, data is available 24/7, and their safety is also assured with the SaaS model.

4. Quality Control

Software as a Service (SaaS) helps businesses or companies to have dominion over their data. Sensitive data are essential and crucial, so allowing an unauthorized user to access them will be a disaster.

Team members can restrict access by reserving access rights to some login credentials, so data will not fall into the hands of hackers. In addition, SaaS products manage applications by protecting quality and integrity.

5. Dynamism and Scalability

Many businesses can easily adapt and adjust to the demands of the SaaS market. As a result, companies can only invest in or use expensive hardware after they perform excellently and carry out swift solutions in their possession.

6. Operational Management

SaaS applications enable companies to run their services smoothly without seeking an initial installation. In addition, there is no need for updating software or equipment as everything is available on the chosen SaaS solution.

Examples of SaaS Applications

Here are the top SaaS providers that help you manage every aspect of your software needs.

  • Google G-Suite
  • Salesforce Sales Cloud
  • Microsoft Teams
  • Zoom
  • Slack
  • Quickbooks Online

SaaS Vs. Cloud

SaaS and cloud computing might seem closely related due to some similarities in their features, but at the same time, they are different.

The main difference between SaaS offerings and the cloud is who manages what. Cloud computing enables users to manage various software business applications hosted remotely or virtually by cloud computing software like Oracle Cloud.

With SaaS solutions, you lose dominion in managing and customizing the software. A SaaS provider maintains and manages the software on behalf of the user.

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Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.