SaaS-Based vs Cloud-Based: What's the Difference?

Software as a Service (SaaS) based and cloud-based products and services may sound like they’re referring to the same thing. True, if the service exists “in the Cloud,” it may be both SaaS and cloud-based. While your SaaS-based application will almost certainly be cloud-based as well, your cloud-based services may not always be SaaS-based.

SaaS is a component of cloud computing. Cloud-based computing has three main components, Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS).

What Is a SaaS-Based Application?

A SaaS-based application, broadly, is any software you run that’s not on your premises. With rare exception, this means most SaaS-based products are run via a web browser or similar and hosted in the Cloud. SaaS is not a plugin and does not sit on your devices.

SaaS-based products have been widely available since the 90’s tech boom when a need for a wider array of cost-efficient computing led the way for software to be hosted centrally and distributed out to meet the demands of rapid scale, often globally, for growing businesses.

SaaS can often increase ROI overall, as there are often lower costs associated with deploying and maintaining SaaS-based applications. The cost-effectiveness of SaaS has remained one of the biggest advantages of SaaS-based software, lowering TCO (Total Cost of Ownership) and increasing margins for B2B and B2C businesses in the information age.

Additionally, choosing SaaS offers a variety of other advantages. With SaaS, you are guaranteed to run the latest, most recent version at all times, with no updating necessary. As SaaS continues to grow and improve, so does the benefits it provides to the consumer.

Examples of SaaS-based applications include Google G-Suite, Office 365, Salesforce, Cisco Webex, and Zendesk.

What Is Cloud-Based?

A cloud-based product or service is anything running in the Cloud. This includes SaaS-based applications, as well as PaaS and IaaS-based. If you require an internet connection to properly run a service, it’s probably cloud-based.

The Cloud is developed as a way to share data faster and more effectively. Technology advancements have allowed for entire servers and storage to be hosted in the Cloud, which comprises the infrastructure portion of cloud computing.

Infrastructure as a service serves to utilize entire infrastructure without the need for on-prem servers. AWS, GCP, and Azure are all mostly IaaS. Your infrastructure, in the Cloud. That said, many services within these overarching cloud platforms can be categorized as PaaS.

Platform as a service builds on top of IaaS and includes the components or framework to create and manage applications. Examples include AWS Elastic Beanstalk, AWS Lambda, and Zoho. The frameworks PaaS provides is often used by developers so they can accelerate the development of their applications.

Reiterating the biggest difference between SaaS and cloud-based services, SaaS is only one part of the larger Cloud. The biggest difference between the two is the magnitude with which cloud-based can be utilized.

What Are the Main Business Advantages of Cloud/SaaS-Based Services?

Cloud-based and SaaS-based services hold similar advantages including:

-No need for lengthy installations. With everything in the Cloud, there are no drivers that need to run, and all updates can happen instantaneously. Additionally, as the Cloud is often hosted and not owned, it’s on the third party to ensure everything is running smoothly and up to date, so you can experience little to no downtime from their side.

-Data can be shared and synchronized faster across your entire network. Everything from code updates to business emails can be shared and collaborated on in real-time.

-Far more cost-effective than entirely on-prem. Storing part or all of your infrastructure in the Cloud is often the most efficient way to manage your company’s data.

–Added redundancy to prevent data loss and outages. Layers of redundancies can be added easily in most cloud environments, making it harder for outages to happen and for data to be lost entirely.

-More secure. Public and private clouds can be used together to add crucial security measures.

The Future of Cloud-Based Products

As the capabilities of what can be done in the Cloud continue to grow exponentially, so do the complexities. Part of an infrastructure, platform, or service can be in the Cloud, and part can be housed on-premises.

Now that we are entering the information age, one thing cloud products do that on-prem products don’t do is collect large amounts of anonymized data and use this within their software algorithms to improve the user experience; making their cars drive more safely (Tesla), suggesting new music that you are likely to listen to (Spotify), or helping you identify the root cause of a network issue more rapidly (LogicMonitor, humble brag). The continued growth of SaaS-based platforms creates that future.

Security concerns can require certain information decentralized, while collaborative projects can require data synced in the Cloud and on-prem in multiple places. You need to be able to manage your entire cloud infrastructure, IaaS, PaaS, and SaaS.

LogicMonitor is a cloud-based service that can monitor all components of computing, whether on-prem or in the cloud, to ensure you have visibility across your entire IT infrastructure. Check out our platform to learn more.

FAQs

Can a product be cloud-based but not a SaaS application?

Yes. A service running in the cloud could be infrastructure as a service (like AWS EC2) or platform-based (PaaS) rather than a full SaaS application. SaaS refers specifically to ready-to-use software accessed via the internet.

How do I know if I’m using SaaS or just cloud infrastructure?

If you’re using a tool like Google Docs or Salesforce with no server management, that’s SaaS. But if you’re managing your own servers or runtimes (like on AWS or Azure), you’re working with cloud computing at the infrastructure or platform level.

What’s the advantage of SaaS for small and mid-sized businesses?

A SaaS application eliminates the need to buy, install, or manage infrastructure by making it ideal for those who want fast deployment, minimal upkeep, and predictable cost savings.

When would it make sense to use PaaS or IaaS instead of SaaS?

Use platform as a service (PaaS) when building and deploying your own apps quickly, and infrastructure as a service (IaaS) when you need full control over servers, storage, and networking for custom workloads.

Can SaaS and on-prem software work together?

Can LogicMonitor monitor IaaS, SaaS, and on-prem in one place?

Yes. LogicMonitor is designed for hybrid cloud environments, giving visibility across SaaS, infrastructure as a service, and traditional on-prem systems from a single dashboard.

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