8 min read
Jan 11, 2021
Insights

Everything You Need To Know About SaaS vs PaaS vs IaaS

Knowing the differences between SaaS, PaaS, and IaaS can help you choose the right cloud computing models for your various business needs.

G.M.
Gitanjali MariaSr. Content Analyst

There are three types of cloud computing models that you could useSoftware-as-a-Service (SaaS), Platform-as-Service (PaaS), and Infrastructure-as-a-Service (IaaS). Each model offers varying levels of support, autonomy, and resources.

As IT managers or business owners, choosing the right cloud service model for your various needs and functions is important to ensure tasks get completed on time, double or extra efforts aren’t needed, and your costs don’t overshoot your budget. 

If you’re unsure which type of cloud computing service model works best for your needs, we can help. In this article, we look at the different cloud service models, benefits, challenges, and use cases.

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1. Software-as-a-Service (SaaS)

The SaaS model can be considered equivalent to renting a fully-furnished room where the maintenance, management, and decor of the room are done by the provider. In the SaaS model, your business doesn’t have to invest in IT hardware resources or in developing and maintaining software/apps. Everything is taken care of by the SaaS provider, you just pay and use. 

Software tools such as , Zoho CRM, or Salesforce that only require you to sign-in using a web browser are examples of SaaS apps.

Dashboard of cloud-based CRM software Salesforce

Dashboard of Salesforce CRM software (Source)

Benefits of SaaS

  • Easy and fast to implement

  • Low costs and no technical knowledge required to use

Challenges of SaaS

  • Limited app and network customization options

  • Limited control over data storage and security, thus increasing your risks

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2. Platform-as-a-Service (PaaS)

The PaaS model is akin to renting a semi-furnished apartment where the management and maintenance of the building are taken care of by the owner but you’re responsible for arranging the layout of the rooms. 

A PaaS provider offers you all the resources needed to create, test, and deploy your app, but the way you design the app (its interface and features) is entirely upon you. Google App Engine and Amazon Elastic Beanstalk are some examples of PaaS solutions that help you build apps.

Flowchart to build an app using Google App Engine

Flowchart to build an app using Google App Engine (Source)

Benefits of PaaS

  • Low-cost option for developing and deploying apps

  • Supports customized development of apps

Challenges of PaaS

  • All PaaS solutions may not support or be compatible with programming languages or web frameworks of your choice

  • Data security issues since data is hosted on third-party servers

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3. Infrastructure-as-a-Service (IaaS)

The IaaS model is similar to renting an unfurnished apartment. While the property belongs to the owner, you’re responsible for its management, maintenance, and furnishing. 

An IaaS provider offers you all the hardware elements (storage, networks, servers, virtualization, etc.) needed to build and run your software apps. You’re only responsible for building/procuring and managing the apps, operating systems, and middleware. AWS, Microsoft Azure, and Rackspace are some examples of IaaS platforms.

Screenshot of Microsoft Azure

Screenshot of Microsoft Azure (Source)

Benefits of IaaS

  • More control of your infrastructure compared to other models

  • High scalability and low infrastructure costs compared to on-premise tools

Challenges of IaaS

  • Customization issues with legacy systems

  • Need to hire or train staff on security, business continuity, and backup

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The difference between SaaS, PaaS, and IaaS

The primary difference between SaaS, PaaS, and IaaS is in the tech elements that a cloud provider provides you and the elements you have to manage. The table below shows what items your cloud provider will be responsible for when using each of the cloud models.

SaaS vs PaaS vs IaaS
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SaaS vs PaaS vs IaaS: When to use what

Let's look at the different scenarios where opting for either of the models or a combination of them can help.

SaaS

You can choose a SaaS app off-the-shelf, sign-up for it over the internet, and start using it immediately. You do not have to spend time or resources implementing it.

Here are some scenarios where opting for SaaS will work for your organization:

  • You want a software solution quickly and do not know how to create one

  • You want to save the time and effort in building an app

  • You’re willing to pay a monthly subscription fee (or rent software!)

  • You’re not in the business of software development, yet want a tool to automate your operations

Who should use SaaS: SaaS is especially helpful for start-ups and small businesses who often don’t have the resources or technical expertise to build apps, but want to scale-up quickly using tech resources. That said, today SaaS solutions are used by many enterprises as well because of their ready-made availability, low costs, and low maintenance efforts.

PaaS

PaaS allows you to build custom apps on a defined framework. This allows you to create an app’s user interface and capabilities according to your style and needs.

The scenarios where PaaS works best include:

  • You have a small team of developers but not the hardware resources

  • You want to save infrastructure costs yet build a customized app

  • You want control over the interface of your app but not its backend

Who should use PaaS: PaaS is generally preferred by developers and start-ups who know how to create software apps but don’t have the resources to host those themselves. PaaS platforms can only be used by businesses or freelancers who have experience or knowledge of app development and integrations.

IaaS

IaaS offers you the basic infrastructure materials but anything over it, you’ll have to take care of it yourself. 

Scenarios where IaaS works best:

  • You have good technical knowledge of networks, servers, middleware, etc.

  • You already have invested in OS, middleware, etc.

Who should use IaaS: The IaaS model saves start-ups and small businesses from having to create or invest in IT hardware resources. The IaaS model is also beneficial for large companies that want flexibility with hardware resources. 

IaaS platforms are often used to complement on-premises resources in a hybrid cloud model, thus improving scalability.

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Using a combination of cloud service models

Your business can use all three cloud computing service models together as well. For instance, for CRM, you could be using an off-the-shelf SaaS product such as Nimble or Salesforce. But your HR team might be using an in-house payroll app designed by your IT team on Google App Engine (PaaS platform). Finally, your internal communication tool might be an app your IT team created on an IaaS platform such as Microsoft Azure. 

Such a use case is perfectly possible and is what most businesses adopt depending on their budget and business needs. In such scenarios, integrations between the tools become very important and should be considered right from the time the apps are developed or shortlisted for purchase. For instance, in the above case, the cloud-based CRM software should integrate with your in-built messenger app for quick and easy communication between your sales reps.

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SaaS is the most commonly used cloud computing service

According to a study, 80% of businesses use SaaS apps for one or more of their business functions, compared to 64% using PaaS, and 48% using IaaS. This makes SaaS the most commonly used cloud model. 

Individual entrepreneurs, SMBs, and even enterprise businesses use SaaS tools for many day-to-day functions because of their ease-of-use, low maintenance requirements, and scalability. 

If you’re looking for SaaS software to jumpstart or improve any of your business functions, we’ve compiled the best SaaS tools using our Category Leader reports.

CRM

  1. VipeCloud

  2. FreeAgent CRM

  3. SalesNOW

HR

  1. Rippling

  2. OnPay

  3. Justworks

Marketing automation

  1. Adzooma

  2. HubSpot Marketing Hub

  3. iPresso

Accounting

  1. KPMG Spark

  2. Sunrise

  3. Wave

For more SaaS solutions to meet your business needs, visit our software directory. We list over 1,000 products in different categories such as collaboration, IT security, supply chain management, business intelligence, and operations management.

Note

The applications selected in this article are examples to show a feature in context and aren’t intended as endorsements or recommendations. They’ve been obtained from sources believed to be reliable at the time of publication.

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