Cloud vs SaaS: A Complete Guide for Business Leaders

• Cloud
• July 30, 2025

by Bipin Mishra

Do you consider cloud and SaaS interchangeable terms? Many think so; however, they’re distinct concepts. While SaaS comes under cloud computing, cloud is a broader infrastructure and service delivery model under which fall IaaS, PaaS, and SaaS. This blog compares cloud vs SaaS on various parameters, showcasing what is saas software, and how it’s different from cloud, along with their relationship, and when to choose one for your specific needs.

“If it’s hosted on AWS or GCP, it must be SaaS.” Do you think the same way? If yes, this blog, comparing cloud vs SaaS, is for you. While SaaS is a part of cloud computing, cloud is a wider delivery model of computing services, which includes IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service). It means all SaaS is cloud-based, but not all cloud-based solutions are SaaS.

For example, Slack, Salesforce, and Google Workspace are SaaS solutions, while Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) are cloud computing platforms. While the former provides ready-to-go apps, the latter is a well-defined platform for cloud application development services.

The glance above may have introduced you to both of the terms; however, it isn’t enough to satisfy your needs. Therefore, browse through this blog from beginning to end, which compares cloud vs SaaS, and shows you the differences between these two. It answers both questions: What is a SaaS-based application, and what is a cloud-based application allowing you to choose what is right for your specific needs.

What Is Cloud Computing?

Cloud computing is the delivery, or on-demand availability, of computing resources, including networking, storage, databases, software, and infrastructure, as services over the internet. It eliminates the need for businesses and individuals to own and self-manage physical resources, rather than accessing these services on demand from cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud Platform, and paying only for what they use.

The term “cloud” in cloud computing emanates from the cloud symbol that was historically used in diagrams to represent the internet, or a network of connected devices, often drawn as a fluffy cloud whose internal workings were abstract or unknown. It tends to act as a metaphor to show that users don’t need to know the technical intricacies of how and where the computing is taking place.

“Cloud Computing” adopted this metaphor to describe how computing resources like storage, servers, and applications are delivered over the internet without users understanding or managing the underlying hardware or infrastructure.

What is Cloud-Based Software?

Cloud-based software, also known as cloud software, is software that is hosted, delivered, accessed, and used over the internet, rather than being installed and run on a local computer or server. This model allows users to subscribe to a service hosted by a third-party service provider and access it through a web browser or application, with no need to purchase and manage software and its infrastructure. AWS, Microsoft Azure, or Google Cloud are some of the cloud-based solutions providers.

There are three types of cloud computing deployment models: public cloud, private cloud, and hybrid cloud. They ease the delivery and use of infrastructure and software services according to the needs of users. Here’s all you should know about it:

Public Cloud

Public clouds offer resources, such as compute, storage, network, and develop-and-deploy environments over the internet. It enables organizations and individuals to access shared on-demand resources as per their needs. Cloud environments are owned and run by third-party cloud service providers, such as Google Cloud or AWS.

Private Cloud

Private clouds are built, run, managed, owned, and used by a single organization and are privately hosted in their own data centers, known as “on-premises” or “on-prem.” They offer excellent control, customization, security, and data management while enabling internal users to benefit from a shared pool of storage, compute, and network resources. Private cloud costs are similar to public and hybrid clouds; however, they come with resource limitations.

Hybrid Cloud

Hybrid clouds combine public and private cloud models, enabling organizations to leverage the best of both worlds. It’s the mix of at least one private computing environment, like traditional IT infrastructure or a private cloud, including edge, with one or more public clouds, therefore called hybrid clouds. It allows organizations to employ public cloud services and maintain the security and compliance capabilities that are commonly found in private cloud architectures.

Types of Cloud Computing Services

Cloud computing isn’t a one-size-fits-all model, falling into three categories: infrastructure as a service, platform as a service, and software as a service, each serving a different purpose. No matter whether you’re building apps, hosting data, or just need an off-the-shelf tool, the different types of cloud services cover it all.

1. IaaS (Infrastructure as a Service)

IaaS is one of the types of cloud computing models that provides on-demand access to IT infrastructure services, including servers, networking, storage, and virtualization. It ensures providing the highest level of control over your IT resources, closely resembling traditional on-premises IT resources. Take Microsoft Azure, for example, which is a popular platform developers use to build and deploy applications without managing servers.

2. PaaS (Platform as a Service)

Platform as a service (PaaS) provides all the tools to develop and deploy software solutions. It enables companies to focus completely on software development, which means your team can focus on coding instead of configuring servers or patching systems. A few of the best PaaS examples are Microsoft Azure and Google App Engine.

3. SaaS (Software as a Service)

Software as a service (SaaS) includes delivering a complete suite of software as a service. A SaaS solution is an end-user application, wherein both the infrastructure and service are managed and maintained by the cloud service provider. Salesforce is an excellent example of SaaS.

What is Software as a Service (SaaS)?

Software as a Service (SaaS) is a cloud-based software delivery model in which a SaaS provider hosts software, and users pay to access and use that cloud-hosted software over the Internet. They use it for a pay-as-you-go model rather than buying it outright. This software delivery model differs from the traditional software model, where one needs to buy and install the software to use it.

SaaS providers provide access to applications for monthly or annual subscriptions, with common features, like pricing tiers and multi-user accounts. Slack and Salesforce are a few examples of popular SaaS platforms that provide tools like communication, collaboration, and CRM through a simple pay-as-you-go model.

SaaS makes it convenient for users to connect to various powerful applications from any internet-enabled device, use them, and pay for the level of service they need.

What is SaaS Software?

A SaaS application (Software as a Service application) is a ready-to-use software solution that’s delivered over the internet, which users access through a web browser or mobile app. This is a software delivery model in which, generally, there’s no installation or complex setup needed on the user’s own devices.

In a SaaS model, the software, servers, storage, and all technical infrastructure are hosted and managed by a third-party provider. Users simply subscribe (monthly, yearly, or pay-as-you-go) and get uninterrupted access to the latest version, updates, and support.

A few examples of SaaS apps include Slack (team communication), Zoom (video conferencing), Shopify (e-commerce), and HubSpot (marketing & CRM). Key features of these SaaS-based software solutions are the following:

• They run in the cloud and are accessible from anywhere.
• These solutions are always up to date with no manual upgrades required.
• They’re highly scalable and add users/features as needed.
• They come at low upfront costs compared to traditional software.

The Relationship: How SaaS Relies on the Cloud

SaaS is inherently dependent on cloud computing. Cloud provides the environment and infrastructure that allows SaaS software solutions to function and be delivered to end users over the internet. It offers the necessary computing power, network, storage, and resources for SaaS to operate. Here’s how SaaS is reliant on cloud computing:

• SaaS is a Cloud Service: SaaS (Software as a Service) is one of the three key cloud computing services, alongside IaaS and PaaS. This model involves delivering fully functional software applications over the internet. It runs on cloud-hosted infrastructure and is accessed through a web browser, freeing users from installing and managing software locally.

• Cloud as the Enabler: SaaS completely depends on cloud infrastructure, like servers, storage, and networking, to deliver its services. The cloud provides scalability, accessibility, security, and maintenance, enabling software to be accessed from anywhere, supporting millions of users worldwide, while providing optimal security and maintenance assistance.

Key Differences Between SaaS and Cloud

Look at the table below comparing cloud vs SaaS on various parameters like features, scope, focus, management, customization, control, and many more. It’ll answer the question “what is a SaaS application,” and what is cloud computing, with examples. 

1. Scope

Cloud computing has a broader scope that includes services like IaaS, PaaS, and SaaS. It provides the foundational infrastructure and platforms needed to develop, host, and manage software solutions.

SaaS, on the other hand, tends to be a subset of cloud computing, which delivers complete software applications to users over the internet. It doesn’t require any setup or server management from the user’s end, but is managed by the service provider.

2. Focus

The preliminary focus of cloud computing is on delivering resources, including compute power, storage, networking, and development platforms.

In contrast to cloud computing, SaaS focuses on usability, providing accessible, ready-made software solutions, for example, email, CRM, collaboration tools, and project management tools.

3. Management

For IaaS and PaaS, in cloud computing, the user or IT team is responsible for managing configurations, updates, and infrastructure setup.

Unlike with the IaaS and PaaS, in SaaS, everything is managed by the service provider. Users access the software via a browser with no need to maintain servers or perform upgrades.

4. Customization

If you’re thinking of leveraging cloud services, especially IaaS or PaaS, and prioritizing customization, you’re right to go. Yes, cloud providers offer intense customization options, especially at the infrastructure or platform level, allowing you to configure environments, install tools, and fine-tune settings.

SaaS platforms usually come with limited customization, wherein you can adjust settings and integrate with other tools; however, you can’t alter the core software or environment.

5. Control

Cloud providers enable users to have full control over backend elements, such as deployment stack, operating systems, and security settings.

SaaS, on the other hand, allows users to have minimal control, as it focuses more on ease-of-use and simplicity rather than backend flexibility.

6. Uses and Users

Cloud computing is typically used by developers, DevOps engineers, IT administrators, and technical teams to develop and deploy software solutions.

The users of a SaaS include HR professionals, marketers, salespeople, and project managers, who need software to conduct daily business tasks.

7. Cost Implications

When using cloud services, businesses leverage a pay-as-you-go pricing model based on resource usage, for example, compute hours and bandwidth. It’s flexible; however, you might need to have technical dexterity to optimize the cost.

SaaS solutions employ subscription-based pricing, which is usually monthly or annually, with predictable costs and no infrastructure overhead.

8. Examples

Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) are a few examples of cloud computing services.

A few examples of SaaS software solutions are Google Workspace, Salesforce, Slack, Zoom, and Canva.

Business Advantages of Cloud/SaaS-Based Services?

There are multiple benefits of cloud and SaaS, including flexibility, cost-effectiveness, improved accessibility, automated updates, robust security, and many more. Here’s how they benefit businesses:

Flexibility & Scalability

If you’re one of those who need to deal with constantly scaling needs, cloud and SaaS solutions are right for you. Yes, whether you’re adding more storage, users, or computing power, with these solutions, you can do all with ease.

Cost-Effectiveness

One of the biggest advantages of using cloud and SaaS is no upfront investment. When using these solutions, you don’t need upfront investment in servers, software licenses, or data centers. Instead, you subscribe to what is necessary, turning capital expenses (CapEx) into operational expenses (OpEx).

Improved Accessibility and Collaboration

For businesses in need of improved accessibility and collaboration, SaaS and cloud solutions are excellent alternatives. These platforms are accessible through the internet; thereby, you can leverage improved accessibility and collaboration irrespective of whether you’re working remotely, across time zones, or on the go.

Automated Updates & Upgrades

Both cloud and SaaS providers conduct all updates themselves. This way, they ensure you get the latest features enabled by instant bug fixes and automated security patches without manual effort or downtime.

Rapid Deployment & Implementation

Does your business need quick software solutions? If yes, cloud and SaaS are options to go with. Since they’re ready to use, they don’t take much time, and ensure instant availability, which is one of the biggest benefits of cloud and SaaS platforms.

Robust  Security

Robust security features like multi-factor authentication and disaster recovery, embedded with most cloud and SaaS services, ensure enhanced security against vulnerabilities. These solution providers invest heavily in data encryption, compliance, access controls, and 24/7 monitoring, often exceeding the security level that the majority of businesses can’t afford to implement on-premises.

When to Use Cloud Computing

• Custom Software Development: If you’re building a unique application or platform tailored to your business needs, choosing cloud computing, especially IaaS or PaaS, is good. They give you the flexibility to develop, test, and deploy software with full control over the environment.
• Need for Scalable Infrastructure: Choosing cloud computing becomes essential when you anticipate unpredictable or rapidly growing workloads for data processing, video streaming, or analytics. It lets you scale compute power, storage, and networking resources as needed.
• Hosting Large Applications or Services: When you’re hosting enterprise-level software, mobile backends, or customer-facing platforms, opting for cloud computing is essential. It offers the reliability, security, and uptime necessary to support thousands or millions of users.

When to Use SaaS

• Fast Deployment with Limited IT Involvement: If you’re a business that needs faster product availability with limited IT involvement, SaaS tools like Slack, Trello, or Zoom are right. 
• Cost-Effective Solutions for Small to Mid-Size Businesses: When a small to mid-sized organization wants to have cost-effective software solutions, they should choose SaaS.

Cloud or SaaS? Let Your Business Needs Lead the Way

This cloud vs SaaS comparison demonstrates that the cloud is an infrastructure and service delivery model, while SaaS is a specific type of software application delivered via the cloud. Both are powerful platforms and tools; however, the best choice depends on your business’s specific needs, resources, and strategic goals.

So, if you’re the one on the lookout for a ready-to-use software application for your business’s needs, you can opt for SaaS applications. On the other hand, if you need to build a custom application without arranging everything on your own, choose to leverage cloud engineering services and solutions.

Still feeling over the map, not getting clarity? Leverage Mindinventory’s cloud consulting services to get comprehensive know-how for cloud development. Be it cloud business transformation consulting, cloud infrastructure and integration consulting, or you simply need cloud migration or multi-cloud consulting, our experts will help you get there!

FAQs on SaaS and Cloud Computing