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Many businesses, especially small and medium size ones, have been increasingly moving to Cloud Computing for one great reason - Huge reduction in business cost. However, there is a fallacy among many people that Cloud Computing and Software as a Service(SaaS) are one and the same thing. Although SaaS is related to Cloud Computing, the duo is very different from each other. In this blog, we will talk about how Cloud Computing and Software as a Service(SaaS) are distinct from each other.

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Cloud is basically used as a metaphor for “the Internet”. Cloud Computing offers storage and access to data and applications over the internet, rather than your local servers or personal devices. So, instead of buying your own servers or software, you can rent computing infrastructure and services to ensure smooth functioning of your business operations.

Imagine that you are a startup company with a unique idea, but don’t have enough funds to bear the cost of infrastructure, hardware and software to kick off your business operations. Here, Cloud Computing comes to your business rescue to prevent it from drowning in the ocean of cost struggles.

Click here to gain insight into 7 Ways Cloud Computing helps SMBs boost their Business.

Cloud Computing comes in Three Forms: Public Cloud, Private Cloud and Hybrid Cloud

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• Public Cloud services are available for use off-site over the internet. You can use public clouds, like Amazon Elastic Compute Cloud (EC2) and IBM’s Blue Cloud, for developing SaaS applications for end-users. The rental cost of public clouds is very pocket-friendly since the provider bears the cost of hardware, application and bandwidth.

However, an organization that deals with sensitive data may not like to go for public clouds since configuration, security, and SLA specificity are weak on public clouds.

• Private Cloud services facilitate flexibility, scalability, provisioning, automation and monitoring for a single company. Private clouds are expensive, but they are highly secured, thus companies dealing with sensitive data may not want to shy away from private cloud model. Private clouds are divided into two categories: On-premise private clouds and externally hosted private clouds.

• Hybrid Cloud is a mix of public cloud and private cloud. So, you can begin using a public cloud to save your business cost, however, you can also migrate to private cloud as soon as you face security concerns.

Microsoft's Windows Azure, Amazon Web Services and Rackspace.com are some of the popular names of Cloud Computing service providers.

Offerings of Cloud Computing Under Public Cloud, Private Cloud and Hybrid Cloud

Cloud Computing service models: Platform as a Service(PaaS), Infrastructure as a Service(IaaS) and Software as a Service (SaaS).

PaaS provides a platform to developers to build applications services over the internet using tools and plugins supplied by the provider. All you need to use PaaS services is a computer with an internet connection, obviously you have to pay for the subscription of PaaS services, but only for the services you use. The best part is you need not to worry about update of services, since the PaaS service provider regularly updates the services, upgrades existing features and adds additional features without charging any fee.

IaaS services include virtual server space, network connections, bandwidth, IP addresses and load balancers. IaaS automatically allocates as many servers as your requirement is, and charges you accordingly. So, IaaS saves you a lot of business cost since you only pay as per the usage of numbers of servers being allocated to your business.

As IaaS is a scalable service, you need not worry if there is a sudden rise in the numbers of your service users. Moreover, the IaaS service provider is responsible for maintaining the data centers. The IaaS service remains unaffected by the failure of one server or network due to the remaining multitude of hardware resources and redundancy configurations. For example, the AWS data integration services.

Click here to learn what scalability means in cloud computing.

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SaaS means computer applications that sit on the cloud, instead of your computer and devices. It’s true that SaaS is available on the cloud, but it must not be mistaken for the cloud. The reason is simple, developers can develop a SaaS application using PaaS, but the application itself doesn’t mean cloud. Google Apps, Salesforce, Workday, Concur and GoToMeeting are some of the examples of SaaS applications. Unlike PaaS services that are used by software developers, application vendors, savvy computer users and IT executives to build a service or app, SaaS applications are used by end-users.

While cloud Computing is meant for high-end customization, SaaS is more about low-end customization. By now, it must be clear that Cloud Computing and SaaS are two very different technologies. The only similarity between SaaS and Cloud Computing is that they free you from the need of having on-premise hardware or software.

The Takeaway: Cloud Computing and SaaS are not one. SaaS is a subset of Cloud Computing.

SaaS relates to Cloud Computing since it sits on virtual servers, but it must no be mistaken for being Cloud itself. You can use a SaaS application that exists on cloud and build it using PaaS, but can’t call it cloud. If you have ever used a SaaS, PaaS or IaaS and want to share your experience or add more on to the distinction between Cloud Computing and SaaS, please put your views in the comment box below.