What are the Differences between Cloud Computing and SaaS in 2023?

As an automation tester, I have a deep understanding of the significance of being knowledgeable about the distinctions between cloud computing and SaaS in 2023. The fast pace of technological advancements and the escalating demand for efficient and versatile solutions make it imperative for organizations to be well-informed about their various choices. Cloud computing and SaaS are two related, but distinct, concepts that offer different benefits to businesses and organizations. While both cloud computing and SaaS provide access to applications and data over the internet, there are some key differences in the way they are delivered and managed. In 2023, the lines between cloud computing and SaaS continue to blur, with more and more businesses moving to cloud-based solutions. However, it’s important to understand the fundamental differences between these two technologies in order to make an informed decision about which solution is best for your organization.

The Basics of Cloud Computing and SaaS

Both SaaS and cloud computing are delivered via Internet technologies and offer similar benefits to users. To make it even more understandable, let’s look at the basics first.

What is Cloud Computing?

Simply, cloud computing is the delivery of computing services, including servers, storage, databases, networking, software, analytics via Internet. Cloud computing enables users to customize and manage any software application on a server hosted remotely by a third-party provider. You can also access your data on those servers via the internet.

Some well-known examples of cloud computing (IaaS, PaaS, and SaaS) are Amazon Web Services (AWS), IBM Cloud, Google App Engine, OpenShift, Salesforce, Dropbox, and Slack.

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What is SaaS?

Software as a service (SaaS) is a web-based delivery of application software to defined user groups or segments. SaaS is one of the most popular forms of cloud computing, defined as a software application service delivery model; where the vendor does not sell a software product, but rather sells a service based on that software. In simpler terms, the vendor creates and maintains a web-based software, which the customer can access remotely via the internet after paying a recurring subscription fee (monthly, quarterly, annually).

SaaS is considered a superior 4.0 model compared to on-premise software – a form of software that is acquired by businesses through a perpetual license.

Some well-known examples of SaaS are Salesforce, Zendesk, HubSpot, Dropbox, Slack, and DocuSign.

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Cloud Computing vs SaaS: What Are The Differences? 

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#1 SaaS is a subset of cloud computing 

SaaS is one of three models of cloud computing, together with IaaS (Infrastructure as a service) and PaaS (Platform as a service). So, the main differences between saas and cloud computing are to gain access to cloud computing services, a specialist vendor has to build a data center and provide sufficient electric power. Thereby, the foundation for a host of cloud-based services is laid. That means, software application or SaaS is just one component, not the cloud itself.

Even though you can procure physical servers to run different in-house software applications, you cannot say that SaaS and cloud computing are the same.

#2 Functionality and Data Security

From a historical perspective, SaaS is defined to lead to the development of cloud computing, which is essentially a larger platform and is where SaaS resides. So cloud computing offers additional services other than just SaaS. SaaS is only understood as a software delivered to an end user from a cloud environment.

Another difference between cloud and SaaS is that with SaaS, all the data resides with the service provider.  The benefits of SaaS outweigh these concerns of data ownership and security while with cloud you have more control. You may manage your data, make backups and store data in the cloud and also move the data out of the cloud environment to your own local repositories.

#3 SaaS vs Cloud Software Licensing 

Another key difference between cloud computing and SaaS is the licensing model.

  • Cloud computing: The pay-as-you-go model is used in most cloud-based services. That means users only pay for computing resources or services used over a specified period and they don’t have to pay if they don’t use the available resources.
  • SaaS: The subscription-based licensing model is used in SaaS. You have to subscribe to a particular pricing plan with defined software use cases, available resources, and usage limitations to gain access. Unlike cloud computing, access to most SaaS services is time-bound. Across different SaaS niche markets, you’ll see varying subscription plans ranging from 1 – to 365 days. In most cases, it’s either you are paying monthly or annually.

#4 Use Cases 

Even though there are some similarities between cloud computing and SaaS, some differences still abound between them.

  • Cloud computing: The majority of cloud computing platforms are built to help other people and businesses build a business (B2B) and user (B2C) facing applications.
  • SaaS: SaaS businesses often tap into the existing resources provided by specialist cloud service providers, Instead of building a cloud-based infrastructure to lay the foundation for software application development.

#5 Ongoing Maintenance 

  • Cloud computing: A cloud computing platform demands high-level expertise for dealing with a data center, physical hardware, server installations, networking systems, power systems, cooling systems, and network security.
  • SaaS: you don’t have to deal with the ongoing maintenance of these systems when building a simple software as SaaS.

The wrap

In conclusion, it’s crucial to carefully consider the nature of your business when examining the differences between cloud computing and SaaS. Large enterprises that handle sensitive data and require more control typically benefit from cloud computing, as this type of infrastructure offers more control and security at a higher cost. On the other hand, small businesses that are looking for cost-effective solutions for their business needs tend to find SaaS to be a better fit. SaaS solutions are typically more affordable and can provide the necessary functionality for smaller operations without the need for a significant investment in infrastructure. Ultimately, the right choice depends on the specific needs and requirements of your organization.

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