Software as a Service (SaaS) and cloud computing have been transforming the way businesses manage their software programs for years. Both solutions are similar in concept, with SaaS and cloud computing eliminating the need for software installation and being entirely managed in the cloud. But there are some key factors that differentiate them.

Cloud computing lets people access computing resources on-demand, with data, analytics and applications stored online. However, SaaS utilises software subscriptions to store your data instead.

Below, we examine cloud computing vs SaaS and which might suit your business most.

What is SaaS?

Software as a Service (SaaS) is the simplest form of cloud computing. It’s an application delivery model based on cloud architecture, but it’s not the same as the cloud.

It’s an alternative to a traditional on-premise solution, instead working as an on-demand software. It’s typically accessed by users via a web browser. Instead of buying a license to use an application and paying to maintain the software, SaaS is ‘rented’ over a period of time (usually monthly or annually).

SaaS is also hosted through a third-party (the supplier). Users will then log on via the vendor and can instantly use the software.

What are the benefits of SaaS solutions?

The main benefits of SaaS are that they provide notable savings for a business. Firstly, SaaS tools eliminate the need for an upfront cost of purchase and installation, as well as ongoing costs of maintenance and upgrades.

This model of service provides a great degree of flexibility, customisation and options as the software is hosted externally. It makes it easy to change your plan, with the additional benefit of allowing access from any location or device. It means that SaaS applications are highly scalable and perfect for the hybrid working world.

Microsoft SharePoint is a great example of SaaS. It is a highly customisable, collaborative Cloud solution that integrates with Microsoft Office 365 and several other applications. SharePoint is designed to centrally house entire projects and documents, enabling multiple users to collaborate across a multitude of devices. Your documents remain fully managed and secure.

What is cloud computing?

Cloud computing enables a user to customise and manage an application on a server hosted by a third party. All you need is an internet connection and the ability to log on to the system via a web browser.

The application isn’t running on any one server, but rather is ‘shuttled around’ or even load balanced over multiple servers in real time as demand requires it.

Cloud computing is a varied landscape. There are several types of cloud, including public cloud, private cloud and hybrid cloud.

What are the benefits of cloud computing?

Before cloud computing, companies would need their own on-site servers at their office in order to use software. They’d also have to use physical media to install software on a computer. Then, this software or data would only be available on a single computer.

Financial flexibility is another core difference between SaaS and cloud computing. SaaS solutions come in at a fixed monthly rate, whereas cloud computing enables the business to increase or decrease its spending each month. This makes it simple to find a suitable for your business’s evolving needs.

Cloud computing automatically backs up data and provides businesses with more control over their software programs. They can then easily increase or decrease capacity.

Enhanced security is another benefit of cloud computing. As data is stored in the cloud, it can be accessed from anywhere. It is also possible to remotely wipe data from a device, making sure that sensitive data doesn’t end up in the wrong hands.
Introducing a reputable cloud environment can therefore pave the way to GDPR compliancy.

Making the choice

When it comes to choosing between SaaS and cloud computing, there’s no one-size-fits-all answer. The right approach depends on how much control, flexibility and scalability your organisation needs, now and in the future. For many businesses, the sweet spot lies in using SaaS where simplicity makes sense, while leveraging cloud platforms to build, run and scale more tailored solutions.

Microsoft Azure sits at the heart of this flexibility. It gives organisations the freedom to move beyond off-the-shelf software, enabling secure, scalable cloud infrastructure that adapts as your business evolves – without the limitations of traditional on‑premise environments.

Want to see how Azure works in practice?
Download our Azure product sheet to explore how Microsoft Azure supports everything from core infrastructure and data storage to security, resilience and long-term growth — and how it compares to SaaS-only approaches.