Last Updated on October 11, 2022 by Tracy Jackson
SaaS vs cloud computing – can you compare the two?
To understand the difference between SaaS and cloud computing, we must first know what each means.
Cloud computing is a model where servers, networks, and data storage are all available via the internet rather than being maintained on a computer on-site.
Cloud computing has three main components – SaaS (Software as a Service), PaaS (Platform as a Service), and IaaS (Infrastructure as a Service).
SaaS is a component of cloud computing. Companies typically purchase SaaS products by subscription and sign in to those systems using the internet and a web browser.
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Table of Contents
What Are Cloud Services?
Cloud services are systems, programs, or data warehouses that store or maintain data and computing resources in a virtual location rather than on-site servers.
The internet is the ‘cloud’.
People use the cloud on a personal or business level for access and storage of services.
For example, you can store your photos on a cloud service (like Google Photos) instead of using up space on your smartphone.
Gartner forecasts worldwide end-user spending on public cloud services to grow 18.4% in 2021 from $257.5 billion in 2020 to $304.9 billion.
What is a SaaS Service?
SaaS services are cloud services accessed by subscription. The software applications can be used across multiple devices and users using a single login. It is owned and maintained by a separate entity.
Within the cloud service industry, the SaaS model is the most popular business model.
PaaS and IaaS are other cloud software models that are also making headway.
How does a SaaS model work?
The SaaS business model is unique because the end-user does not own the SaaS product but leases the software application from the software vendor.
There are certain factors that vendor SaaS and cloud computing vendor needs to focus on:
For a subscription-based service, clients need to pay regularly to continue using the service. Vendors must find efficient ways to keep track of this monthly recurring revenue.
The key to a successful business is to retain your existing customers. It takes more for you to invest in a new customer than to keep an existing one. Customer retention is at the forefront of successful SaaS application businesses.
Every day new SaaS applications are appearing in every niche. Regular upgrades to the application software are crucial to keeping your customers satisfied to continue doing business with you.