SaaS, PaaS, IaaS or on-premises hosting: what's the difference?

Published Thu 09 Nov 2017

Companies are adopting cloud computing into their business practices now more than ever before - 85% of enterprises have a multi-cloud strategy in 2017, according to a survey by RightScale, and the benefits to businesses have been proven. However, it's easy to get confused - the term ‘cloud computing’ itself already encompasses numerous services. SaaS, PaaS, IaaS - what do these acronyms mean? Where does on-premises hosting come into things? Most importantly - which option is best for you?

Cloud computing generally refers to using computing services such as storage, database access, applications and web servers via a network of remote computers over the internet. A common example would be Gmail - an email server application which you access via the internet. You don't need to install anything on your local machine to access your inbox - it exists online, 'in the cloud'.

SaaS (Software as a Service), PaaS (Platform as a Service) and IaaS (Infrastructure as a Service) segment the cloud by offering type. Let's explore.

Software as a Service

Software as a Service, also known as ‘hosted software’ or ‘on-demand software’ offerings, allow businesses to utilise software without requiring any physical installation, regular updates or maintenance by themselves. A prime example of a SaaS offering is Salesforce, one of the most popular CRM systems in the world.

SaaS allows businesses to avoid requirements for server space and software licensing fees - instead, subscriptions can be managed online based on number of users and project demands. SaaS offers great flexibility in terms of quick deployment, as well as adaptability towards individual business needs. Additionally, any problems encountered with the software – such as system errors or disruption - tend to be quickly resolved by the service provider.

The potential headache for businesses who choose to adopt SaaS applications is in utilising multiple SaaS applications at once. Applications don't always harmonize with each other, which can lead to struggles trying to integrate data from multiple sources. (Digital Assistant is a great tool which can help to overcome this - it integrates with over 50 applications out of the box to use data unilaterally across sources). Security can be another cause for concern - there are significant regulations based around storing personal data on remote servers, and this should be taken into account when considering your options.

Platform as a Service

Platform as a Service operates in a similar manner to SaaS, but operates at a lower ‘level’. PaaS is targeted towards companies who wish to develop or host their own applications in the cloud - the service provided is a platform on which software applications can be developed and deployed. Heroku is a well-known cloud application building platform – such providers would typically provide servers, network infrastructure and operating system software, as well as database software and software development runtimes.

PaaS offers convenience and simplicity for companies who wish to develop and host software and applications, and eschews the costs involved with physical server installations and maintenance, as well as the time cost required to get a development environment up and running. However, if you choose to use a PaaS environment to host your application, service availability can be a concern - any downtime of your provider would result in downtime to your customers. In a similar vein, any changes to the environment by the provider - for example, using a different set of development tools - could have a detrimental impact on your business operations.

Infrastructure as a Service

Last but not least, Infrastructure as a Service includes the lowest level of service. A typical IaaS subscription might include the server computation power and storage, network structure and a virtualisation layer. Your business would then have to create virtual machines, install operating systems and any other software and perform maintenance and management of these systems. IaaS is ideal for businesses who require a fine level of control over their cloud environment, and IaaS providers frequently offer a range of additional infrastructure components to augment your service.

IaaS allows companies to operate with reduced costs as they do not have the constraint of purchasing and maintaining hardware. An additional benefit comes in the form of flexibility of capacity - companies can pay for as much or little storage or computing power as they need, and can vary this requirement on an hourly, weekly or monthly basis. This allows for greater use flexibility, and can also be practical for testing a new product prior to moving to a traditional server environment. The granularity of the billing of IaaS can come as a shock if you're not prepared, though - it can be easy to go over budget on costs you might not expect. Reliability is also a concern - your server's availability is fully dependent on your provider.

On-Premises hosting

On-premises hosting is the opposite of cloud hosting. You purchase your own servers and computers, and software you use or develop is installed directly onto your servers for use by your business. As a result, you have complete control over the configuration of your system, any changes which happen to your system, and when your software is updated. You don't need to reply on internet access to use your software - so downtime is not a concern - and you only need to pay for your user licenses once, as opposed to on a subscription basis.

On-premises hosting puts full responsibility of your environment into your own hands. This can be a blessing or a curse - you need to be diligent to ensure your setup can handle disruption, that your data is secure and that your software is well maintained and updated. If you're unable to keep up with the maintenance and security aspects, on-premises software hosting may not be the best choice. Additionally, on-premises hosting has a large initial expenditure, and can take time to implement (due to the physical aspects of the installation).

The big question - which option is best for you?

There's no right or wrong answer - this completely depends on your own requirements. Consider what you would be using the service for (if you need an application and don't want to run your own, SaaS would fill that space - however, if you're developing your own in-house application, PaaS might be more applicable). Also think about what level of control you need over your environment - if you need to fine-tune your environment based on your goals, IaaS or on-premises hosting might be your best bet.

Are you considering utilising SaaS applications for your business? Learn more about Digital Assistant and how it can help you aggregate your data sources into one simple, accessible API - making integrating multiple SaaS apps simple. Digital Assistant supports 50+ applications out of the box, so you don’t have to compromise on choosing the perfect enterprise software.

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