Software development best practices

SaaS vs Cloud Services: explained and compared

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As you start taking advantage of the cloud for your business, it is vital to really figure out the difference between SaaS and other cloud services. People tend to use the terms SaaS vs Cloud services as interchangeable notions and this is wrong. 

The first thing you need to remember is that Cloud and SaaS are not equivalent. Software as a Service (SaaS) is a part of Cloud computing together with Infrastructure as a Service (IaaS), and Platform as a Service (PaaS).

paas-saas-iaas

IaaS provides processing, storage, networks, and other fundamental computing resources to customers.

Examples of IaaS you may know: Microsoft Azure, Amazon Web Services (AWS), DigitalOcean, Rackspace, Linode, Google Compute Engine (GCE).

PaaS provides a platform (OS, etc.) with cloud components for building software. All servers, storage, and networking are usually under the responsibility of a third-party provider. Developers use PaaS as a framework to build and maintain their applications.

Here are famous PaaS examples: AWS Elastic Beanstalk, Heroku, Windows Azure, OpenShift, Google App Engine

SaaS provides an online application to its users. Most SaaS products don’t need to be downloaded and installed, as users can work with the app through the web browser.

The best Software as a Service (SaaS) examples are Google Docs, Hubspot, Mailchimp, Salesforce, Dropbox, Slack, Cisco WebEx, GoToMeeting.

Hope this comparison сleared things up a bit.

Now let’s explore the peculiarities of Cloud and SaaS separately.

SaaS vs Cloud: What they mean and how they differ

Cloud computing

“Cloud computing is a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service using Internet technologies.” – Gartner IT Glossary

The term “Cloud” becomes a metaphor that refers to Network or Internet. Simply said, cloud computing is the delivery of computing services — servers, storage, databases, networking, software, analytics, intelligence and more — over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. So you pay only for cloud services you use, helping lower operating costs, run your infrastructure more efficiently and scale as your business needs change.

Cloud-vs-SaaS

In case you decide to use Elastic Compute Cloud (EC2) service from Amazon you will actually create or rent a virtual server or several virtual servers running on Amazon’s infrastructure. Amazon, in this case, will instantiate a virtual server for you and, in return, you will pay a certain fee depending on hours or data stored.

Software as a Service

Software as a Service is a way of delivering applications over the Internet. It is any software application which you run and is not located on your premises.

Cloud-vs-SaaS

Software as a service is a modern way to deliver digital services to customers. Companies develop SaaS products and provide it on a pay-for-use basis or as a subscription based on use metrics.

Customers don’t need to install software to their machines, as it’s stored in the cloud.
Users are able to access SaaS products online using the web browser only and login + password.

The benefits for both SaaS providers and users are:

  • Updates and installations of new app versions occur automatically without customer intervention;
  • Users pay a monthly or annual fee depending on the level of service provided within SaaS product; and
  • There is no need to for extra soft- or hardware to be installed.

In 2023, global SaaS revenue reached $258.6 billion on a way to grow to $400 billion by the decade’s end.

So, let’s sum up the advantages and differences between Cloud computing and SaaS:

Cloud-vs-SaasCloud-vs-Saas

SaaS vs PaaS vs IaaS: What to use

If you still hesitate and cannot decide what cloud model to adopt, let’s review several cases.

cost of saas product development

SaaS

If your business goal is building a convenient and contemporary software product, SaaS application development is what you need.

We recommend SaaS business model to the majority of our clients, as it provides a number of benefits both to the software vendor, and customers.

For example:

  • it has a subscription-based pricing model. Different subscription plans depend on a number of users or data stored. As a result, clients can start fast with a free plan or trial version, then continue with a suitable plan, without large up-front license commitment; and vendors have a regular, predictable income;
  • it is well suited for applications that are in irregular high-demand, such as tax software, for instance; and
  • it is accessible from anywhere via the internet using a computer or a smartphone, being a good option for applications requiring both web and mobile access.

Here in MindK, we have already helped our client CEMAsys to transform from an offline consulting company into a successful product company. Together with them, we’ve built a SaaS web app, which is now used by top Norwegian and global companies to manage and report all the important sustainability and environmental information.

CEMAsys

If your company already has a custom web or mobile application, SaaS application can easily flesh out its usage. This is because it is possible to build an integration of your app with almost any SaaS product, which has an open API.

This way you extend the possibilities of your application by adding functionality of third-party SaaS solution (e.g. invoicing, financial management, strategic planning, document workflow, staff/business performance tracking apps).

For example, the MindK team relies entirely on Jira for managing business processes on the daily basis. Integrating Jira with our internal software streamlines processes, improves reporting and really saves project managers time.

If you looking to automating business processes in your company, but don’t see the need to develop your own applications, SaaS is still the very thing to try.

Since SaaS application market is quite competitive, the quality of the solutions is worthy. Most of them you can test before purchasing a subscription. Here’s what our team uses for improving processes:

  • Slack is a messaging app for teams which allows interacting with colleagues fast and easy. It enables creating specific channels for your projects or teams, searching through conversations and so on. Slack may be an excellent option for any company, especially for startups (it has a free version, by the way) and remote teams.
  • MailChimp helps us to send emails and newsletters, create marketing campaigns and more. It also has a free plan (up to 2,000 subscribers), which is an excellent solution for startups to use.
  • Trello is used by companies all over the world, including Google, PayPal, National Geographic, Adobe etc. It is an extremely intuitive project management tool. It helps us create tasks and keep track of boards and lists. We use it to cooperate with many of our clients, as they are able to post tasks, tickets or issues on the Trello board and control its progress in real time.

The solutions mentioned above are not all SaaS products we use here in MindK. Nevertheless, each of them serves a specific purpose, making our team more productive and focused.

PaaS

Platform as a Service gives an opportunity for developers to focus on the creative side of software development and not to worry about infrastructure related issues as updates, load balancing, storage etc. So, if you have software development team which follows the Agile methodology, involving external parties or outsourcing your SaaS development, using PaaS may be a perfect approach for you. It can simplify some challenges that come up if you are rapidly developing or deploying an app.

IaaS

If you work in a startup or a small companies, creating hardware and software may be very time-consuming and expensive. In this case, IaaS is a great option for you. It is also beneficial for growing and businesses that are unsure about their future needs and requirements for software.

Conclusion

Utilizing full cloud computing infrastructure is really beneficial for large companies requiring great control of sensitive information and those who want to a 100% control over entire infrastructure without having to physically maintain it.

Large established companies are more likely to afford this type of infrastructure.

It is crucial for a company to make a wise choice judging from its own specific requirements, as each of the cloud models suggests particular functionalities. With any option you choose, shifting business processes to the cloud is the world to come, so it’s time to get ready.

MindK has helped dozens of companies migrate to the cloud, optimize cloud costs, and build cloud-native SaaS products from the ground up. So if you have any questions or need help with your project, feel free to drop us a line.

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