SaaS vs. Cloud: Get to Know the Differences
There is a common misconception that Software as a Service (SaaS)-based and cloud-based products and services are the same thing — but not quite. What can be complicated is the fact that when services or products exist in the cloud they can be SaaS-based and cloud-based.
Confusing, right?
Think of it this way, while your SaaS-based application will almost certainly be cloud-based, your cloud-based services may not always be SaaS-based.
SaaS, in principle, has little directly to do with the cloud – or the internet in general. SaaS, as its full name suggests, refers to a business system wherein the software is leased to users for a recurring price. The cloud is a different story.
To understand this concept and what it means to you, we provide the insight you need to understand the difference between SaaS and the cloud, and the breakdown of management and costs of both.
So, What’s the Difference Between SaaS and the Cloud?
According to Computerworld, the primary difference between the two can be summed up as the following: SaaS offerings are fully formed end-user applications that can be thought of as on-demand or hosted software solutions that are ready to use. On the other hand, cloud computing is a computing infrastructure that is accessed on demand by a cloud service provider via the internet.
In addition, with cloud computing, end users can customize and manage any software application on a server that is hosted remotely by a third-party provider such as Amazon Web Services (AWS), Microsoft Azure, or Google Cloud.
What SaaS and cloud computing have in common is that both are an alternative to on-premise servers and hardware. Unless your company develops software, most will want to focus on SaaS than cloud computing, and how SaaS products and services integrate with collaboration tools such as Microsoft Office 365, Zoom, Google Workspace, or with CRM (customer relationship management) and MA (marketing automation) licensing tools like Salesforce, HubSpot, and Marketo applications.
Understanding what the cloud and SaaS offer is critical to reducing costs or maximizing operations and ensuring your business is getting the most out of what you pay for.
Discover Cost Advantages and Disadvantages Between…
• SaaS
For more than 20 years, SaaS has been the go-to software solution for businesses due to its low cost, easy setup, and accessible nature. In fact, 99% of businesses are expected to use one or more SaaS solutions by the end of 2023, according to Zippia.
While SaaS solutions are known for their efficiency, scalability, customization, and automation, they can be:
- Difficult or complicated to use in terms of how they integrate with collaboration tools
- Costly due to monthly fees that correlate with licenses based on users and usage level
👉 Case in point: With the common collaboration tools used by businesses including Microsoft Office, Zoom, Google Workspace, and more being subscription-based tools, it’s important to monitor these expenses and ensure businesses are optimizing what they are paying for, or reducing their usage levels to maximize cost savings.
SaaS-based products require payment to access software apps that are already working and in the cloud. Users don’t need to pay for maintenance, but they do lose some customization functionality they may be used to. In addition, users with SaaS-based applications do not need to pay for or make room for servers, which can be costly. For small to medium-sized businesses, SaaS-based applications are beneficial in that users can pay for what they need, when they need it, which is optimal for businesses with modest, predictable needs.
• Cloud
As for the cloud, businesses benefit from instant collaboration through software that is accessible anytime, anywhere, and can be used on demand by teams in any location. One of the chief benefits of using cloud solutions is that these solutions offer unparalleled scalability, allowing for adding and removing resources and servers as needed.
With cloud offerings including AWS, Microsoft Azure, and Google, businesses need to focus on the costs associated with databases, storage, and servers. Although the cloud is often thought of as a cost saver for businesses, 82% of respondents state that managing cloud spend has become problematic according to a State of the Cloud report by Flexera.
The Key to Managing Your SaaS and Cloud Costs
For businesses looking to not only manage but optimize and predict their SaaS and cloud costs, SpyGlass’s SnapShot Audit helps:
- Make scalability recommendations based on usage and functionality of their environment for SaaS-based services
- Determine commitment feasibility and how businesses use their storage relationships
After reviewing this information, SpyGlass TEM experts help businesses discover:
- What they’re spending
➡️ Are you spending on services or user licenses that you don’t need? Are you not spending enough?
- Where they’re spending
➡️ Are you spending on services you no longer use or, are redundant in what they provide?
- How to optimize savings based on personalized savings recommendations that fit their needs
➡️ Are your SaaS and cloud expenses on par with where you need to be now and in the future? Are your efforts scalable, predictable, and able to meet your needs to ensure success? ➡️ Concerned about moving to the cloud or managing current cloud costs?SpyCare® — the SpyGlass exclusive technology expense management (TEM) solution — provides upfront know-how and ongoing discipline needed for long-term strategic cloud cost control for ensured ROI.
Are your SaaS subscriptions scaled to your usage and functionality needs? SpyGlass provides guidance and recommendations to optimize both your SaaS and cloud investments. Get the guidance and savings you need with a SnapShot Audit.