SaaS vs hosted: which is best for your software?

Cloud-based software is the new normal – but there's more than one way to get there. Learn the difference between SaaS and hosted in our quick read.

The world of tech can sometimes get lost in a blizzard of jargon. The simplicity and beauty of the solutions on offer become impenetrable to outsiders.

People outside the tent looking in can still be heard saying that "the cloud" essentially refers to data storage. A corporation with a cloud solution has a big online repository of files that they can access anywhere.

But most corporations now run some or all of their software on the cloud, too – be it comms software like Slack and Teams, the company's CRM or its finance solution.

Just as there are different options for cloud storage – private, public and hybrid being the most common – so there are different ways to run your software on the cloud.

One of the big distinctions made in the cloud world is between SaaS (software-as-a-service) and hosted software.

Both are ways of installing and running software within a business. Both are cloud solutions, meaning staff members can use them from any location and any device (so long as they have access permission).

So what's the difference? The terminology doesn't help – surely all software is "hosted"?

While they're run in different ways and require different things from your IT teams, the key difference is monetary.

SaaS is a subscription model. You rent access to the software from a provider. Hosted, by contrast, is a product that you buy and own outright. With SaaS, you're renting. With hosted, you're the owner.

The distinction is important because the software you choose is bound up with your budget and your business goals. Choosing between SaaS and hosted is like deciding whether to rent or buy a company car. Each option has its advantages and disadvantages – so, which is right for you?

What is SaaS?

These days, you see the suffix "aaS" everywhere – SaaS, PaaS and IaaS, to name just a few. They fall under the catch-all term XaaS, which stands for "anything-as-a-service".

-aaS solutions are on-demand. The software is run by the provider on its own systems. You subscribe and get access to the software when you want it.

To take an example from outside the business world, Netflix could be called TVaaS. Your subscription gets you access on any device from any location – and if you want to add or remove a user, it's a piece of cake to do so.

This is what's meant by "scalability" – the option to make your subscription bigger or smaller. This makes it ideal for businesses of all shapes and sizes.

What are the advantages of SaaS?

• It's affordable.
• It's easy to set up and deploy.
• It's accessible from any device and any location.
• It's scalable.
• It's sturdy. The infrastructure is run by companies with vast resources, so the prospect of system failure or a DoS attack is unlikely.
• It's easy to use.
• It's automated. Updates are installed without you having to lift a finger.
• It's easy to ditch and switch if you're unhappy with the service.

What are the disadvantages of SaaS?

• You're not fully in charge of upgrades and changes to the software.
• Not all software is available as a service.
• It can be slower than hosted software.
• You need a robust internet connection to avoid being locked out of your software.

What is hosted software?

If SaaS is a rental car, then hosted software is your own set of wheels.

You purchase and own the software. This will require a large upfront payment – but as with all outright purchases, it tends to be cheaper in the long run.

At this point, you might be wondering how hosted is different from "on-premise". The difference is that hosted software is run on servers that are located – and maintained – elsewhere. On-premise (or on-prem) is your responsibility. If someone spills a cup of coffee on the racks, you're the one who has to fix it.

What are the advantages of hosted software?

• It's more customisable than SaaS.
• It offers greater control over upgrades and changes to software.
• It backs up regularly.
• It's good for companies and institutions that handle sensitive data and want a high level of oversight, maintenance and security.
• It tends to cost less in the long run than SaaS.

What are the disadvantages of hosted software?

• It typically requires a large upfront payment.
• It depends on a reliable internet connection.
• It can be tricky (or at least time-consuming) to integrate with other software.
• It requires continuous maintenance and management.
• You pay for power, cooling and hosting (with SaaS, these are outsourced to the third-party provider).
• It's less intuitive and user-friendly than SaaS. You may need to invest in training and personnel as well as the software.

Conclusion

The choice between SaaS and hosted is very similar to that between renting a property and buying one. It's all about convenience versus control – with a big financial consideration often making the choice for you.

If you want to be in charge of your software and have the capital to purchase it, hosted software could be for you. If, on the other hand, you want the convenience and utility of SaaS and are more comfortable paying from month to month, SaaS is the way to go.

As with all cloud solutions, there's no one way to achieve your goals. But it can be difficult to penetrate the fog of technical details and figure out the best path for you.

That's why working with a cloud partner can be so beneficial. You get expertise on tap, explained in jargon-free English. A reputable partner will always work with you to align your cloud solutions with your business goals. What's not to like?

Ascend is a trusted provider of cloud solutions in Ireland and beyond. Are you looking for a cloud consultant? Feel free to get in touch for a no-obligation chat.