SaaS Vs. Cloud, What’s the Difference and Why Should I Care?


Laura Schomaker, Senior Marketing Associate

August 22, 2019

The technology industry is notorious for using acronyms which to the uninitiated sound like pure gibberish. But if you’re not familiar with these terms when researching solutions for your business, the process can quickly become confusing and headache inducing. So today, I want to talk about two important ones that people often find most confusing. They are SaaS and cloud computing.

It’s true these terms are closely related. So much so that sometimes people, me included mistakenly use them interchangeably. But there are some important distinctions.

SaaS Vs Cloud Computing, What’s the Difference?

Cloud computing, or “the cloud” as people sometimes call it, refers to access to software or data storage via a network, usually the Internet. You buy a license which gives you the right to use the software. Sometimes you may install the software on your computer, or those owned and managed by another company i.e. a hosting provider. But to use the software you must first connect to the network (Internet).

Examples of Cloud computing

  • Amazon Web services or AWS
  • Microsoft Azure
  • Google cloud

Now, let’s shift our focus to SaaS (Software as a Service). While the term may seem puzzling at first, it works just as it sounds. Instead of buying software on CD as you would have done 15 or 20 years ago, you buy it as an intangible service. You do not load it on your computer, you access it over a network, usually the Internet. Also, instead of paying for the whole thing up front, vendors often break the cost down into installments.

So, all SaaS is cloud computing, but the cloud is not always SaaS.

Examples of SaaS

  • Google docs
  • GoToMeeting, a well-known web conferencing platform
  • Grammarly, a popular tool for proofreading documents

SaaS Vs Cloud, Why Should I Care?

Now we have a basic understanding of SaaS vs cloud and how they differ, let’s look at some benefits each provides.

Benefits of Cloud Computing

  • No need to invest in expensive hardware
  • Freedom from time-consuming and costly hardware maintenance
  • Anytime anywhere access
  • State-of-the-art data security included
  • Pay only for the resources you need, as you go

Benefits of SaaS

  • Lower upfront costs
  • Anytime, anywhere access
  • Enjoy new features without the upgrade headaches
  • No software installation required


I hope reading this short article has helped you better understand SaaS vs cloud so you can decide which fits your needs. Want to dig deeper into the concept of cloud computing and its different flavors? Visit this webpage.

Other Posts You May Enjoy

How to Choose the Right ERP System? An Expert Guide

To help you navigate the confusing ERP evaluation process, we looked back at our over 28 years’ experience in the industry and put together a definitive guide titled “ERP Buying Is Easy If You Do It Smart. Get your copy now and let us walk you through the ERP buying process from start to finish.

SaaS Vs. Cloud, What’s the Difference and Why Should I Care?

The technology industry is notorious for using acronyms which to the uninitiated sound like pure gibberish. Two of the most commonly confused ones are cloud and SaaS. Not sure which you need? Read this blog post to learn the differences between them and the benefits each offer in two minutes or less.

[Video] On Premise or Cloud ERP, Which One Is Right for You?

To begin to decide whether an on premise or cloud ERP is better for you, ask yourself this. Do you want it to run on servers you own and support or do you prefer to use someone else’s servers? While this is a good starting point, it’s not the only important consideration. Explore other key factors.

Five Time-Saving Benefits of the Cloud

Often, when speaking of the benefits of the cloud, people focus on cost savings. But what about time savings? Aren’t those just as valuable? Discover five powerful ways cloud systems can help a small business like yours save time and avoid headaches. Imagine what you’ll do with the extra time. The possibilities are endless!

Outsourcing Payroll Pros and Cons: Which Is the Right Choice for Me?

Not sure whether to keep payroll in-house or outsource it? This is a complicated decision with many factors to consider. To help make it a little easier, one of our ERP experts looks at the pros and cons of the most common payroll options and offers a third option that’s a good fit for some.