Cloud and Software as a Service (SaaS) are two terms you hear almost every day now.
When evaluating different technology options to run your business, you’re bombarded with descriptions of hosted or cloud-based platforms. You see that they can be SaaS, IaaS, or PaaS applications.
What do these different terms mean?
In this article, we’ll help define the terms cloud and Software as a Service (SaaS). You’ll understand how their differences affect how you interact with the technology you use every day.
What is Cloud Computing?
Cloud computing and SaaS are different, but closely related terms of the same idea. We’ll explain that more in-depth later. First, we’ll define cloud computing and SaaS.
Cloud based software is no longer emerging and disruptive technologies, but rather mainstream. Cloud based business applications range from organizational software like Trello and Slack to Enterprise-management software such as ERPs, web content management systems and CRMs.
In fact, Forrester estimated that the total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate (CAGR).
So, what is the cloud? The cloud can be thought of as the internet.
If you’re using cloud based software, you can use the internet to access that system whenever and wherever you are. You just need an internet connection and the ability to log into the system via a web browser. You can be on a desktop computer, phone, or PC. You can be at the office, home, or at the airport. It doesn’t matter, as long as you got WiFi.
Before cloud computing, companies would need their own servers or hardware on-premise to use software applications. You would have to physically install a CD on your personal computer to use it. From an IT perspective, teams no longer must own and operate their own hardware and software assets. In other words, they don’t need deep expertise to set up, maintain, and secure their resources.
A cloud service provider, on the other hand, is a 3rd-party who hosts your software on remote servers where they store and process your data. These servers are housed in data centers all over the world. Cloud computing can help save IT services costs because the provider is maintaining and sharing computer systems services across multiple organizations.
In short, cloud computing is a network of remote servers hosted on the internet to store and process data, instead of a local server.
Cloud Software Benefits and Examples
There are many benefits to cloud computing. You don’t have to host, maintain, upgrade, or worry about data security of the servers for your software applications. You have access to your data in real-time, whenever you need it. Costs are usually lower because you just pay to rent space on the hosted servers. You usually pay by subscription to have access to your data, which allows you to scale resources as you need.
Major cloud service providers include:
- Amazon Web Services (AWS) – Amazon’s global compute, storage, database, analytics, application, and deployment services.
- Google Cloud Platform – Google’s core infrastructure, data analytics, and machine learning.
- Microsoft Azure – Open, flexible, enterprise-grade cloud computing platform
Note that Forrester estimates that these three platforms will capture 80% of all cloud revenue by 2020.
With cloud computing, you’re responsible for maintaining whatever applications you run on the 3rdparty’s or Amazon’s servers. The hosting company maintains the physical servers and operating system.
So where does SaaS come in?
What Is Software as a Services (SaaS)?
Software as a Service is a software licensing and delivery model in which software is licensed to a user. The software, or application is accessed via the internet and a web browser. You do not need to install and maintain the software locally.
The application runs on the SaaS provider’s servers. The 3rd-party provider then is responsible for the security, performance, and maintenance of the application on their servers.
Typically, SaaS applications are licensed on a subscription basis. You pay a monthly fee based on level of service and number of users needed. In this way, a SaaS delivers and maintains their application to you over the internet, as a service.
SaaS Benefits and Examples
SaaS software has many known benefits. Just like cloud computing, it’s a cost-effective way to have real-time access to software whenever and wherever you have an internet connection. You don’t have to worry about server maintenance. Multiple users from 10 – 10,000 can access have to the same software.
You’ve probably heard of SaaS applications such as:
- Salesforce – A popular CRM that can be accessed through the internet
- Quickbooks Online – Access your accounting records from anywhere in the world
- Citrix GoToMeeting – Log in via your web browser to start web conferences.
There are different terms such as IaaS and PaaS, which stand for Infrastructure as a Service and Platform as a Service respectively. They also involve cloud computing, but offer different capabilities as a service.
SaaS is a license for access to a specific software application via the internet.
Cloud vs SaaS
You can see that cloud computing and SaaS are two different, but closely related terms.
With cloud computing, a user is able to customize and manage an application on a server that is hosted remotely by a third-party like AWS. You are given access to your data on those servers via the internet.
With SaaS, the user no longer has to maintain either the physical servers or the cloud based software application. Instead, you pay a subscription to access an already developed software application via a web browser. You don’t have the responsibility of maintaining the software. You lose some control over the management and customization of the application.
nChannel is a good example of both a cloud computing and SaaS application. nChannel provides a cloud based integration software that connects retail systems like eCommerce, ERP and POS systems that helps merchants with order management, inventory synchronization, and product information management by integrating their ERP, POS, eCommerce, and marketplace systems.
How we deliver this cloud application to customers is a SaaS model.
This application we built can be accessed via the internet by our customers, but we maintain, manage, secure, and process our customers’ data that is kept on remote servers as the “cloud.” We don’t maintain the physical servers themselves. We just maintain the application that is run on them, which we call nChannel’s retail integration software.
To access this cloud based software, our customers pay a monthly subscription rate. Multiple users can use it and access it via any web browser. We’re in charge of maintaining the application and processing your data.
As you can see, cloud computing and SaaS are two different ideas, but they work with each other to bring easy-to-access, cost-effective software applications to all types of end users.