Here’s a brief orientation on how SaaS, PaaS, and IaaS work — as well as some tips on how to choose the best one for your small business.
SaaS, IaaS, and PaaS are popular cloud computing software we use to create, build and store information over the cloud. This software helps us build, host and manage all business activities on the internet. There is hardly a single day we don’t interact with at least one of these three forms of software — hence the need to have a basic knowledge of what these cloud computing software do and how we can leverage them even more for our business activities. Below, I’ll break down how exactly SaaS, PaaS, and IaaS work and give you some tips on how to choose the best cloud computing software for your business:
SaaS: Software as a Service
Software as a Service (SaaS) is existing cloud-based software created by a (SaaS) company and made available to the general public through the internet. SaaS products are available either through a subscription or a one-time payment. It may also be free.
As an entrepreneur, you often use SaaS products to manage your business documentation and files (Google Drive), have video conferencing with your employees (Zoom), collect prospect contact information and connect with them (HubSpot CRM) and send business emails to our business partners (Gmail, Yahoo! Mail, Outlook, etc.).
If you’re following the examples above, you will notice that your company does not have to develop its video call software but rather pay a subscription fee to Zoom (a SaaS company). You also don’t have to trouble yourself building in-house storage to keep your business documentation like videos, pictures, spreadsheets, etc. Instead, you pay a one-time payment to purchase space on Google Office Suite (a SaaS product).
Your company also did not build the content management software you used to collect leads and send marketing messages to your prospects. So instead, you paid a subscription fee to Hubspot and started enjoying this service. And lastly, there is something peculiar here: None of this software is installed directly on your computers. Instead, you access them directly through a website or web application. Here are five examples of popular SaaS products below:
- Slack: used for team collaboration and communication
- Hubspot: used for sales, marketing, and customer relationship management
- Freshbooks: used for business invoicing and accounting
- Zoom: used for video conferencing and meeting
- Calendly: used for meeting and appointment scheduling
PaaS: Platform as a Service
Platform as a Service (PaaS) is a cloud-based platform that gives developers all the resources they will need to build custom web applications or software without dealing with data management and storage. Basically, what PaaS companies offer SaaS companies is a platform to build their software for you.
In other words, while you are paying Zoom for using its video conferencing software, Zoom and its developers create and host their software on Google App Engine, Windows Azure, and AWS Elastic Beanstalk.
The simple logic here is: While you could have had to go through the stress of hiring in-house engineers to create the software you use for your business management, SaaS companies do this for you by leveraging PaaS online platforms to create, build and host their software.
However, that does not mean you cannot build your software yourself. For example, many businesses build some of their web applications and software themselves and host them directly on a PaaS — but the probability that you won’t eventually integrate one or two SaaS products is slim, if not impossible. Here are five examples of popular PaaS companies:
- Google App Engine
- AWS Elastic Beanstalk
- Windows Azure
IaaS: Innovation as a Service
Innovation as a Service (IaaS), as the name implies, is where all activities are centered. Simply put, it is the headquarters of all cloud computing software.
After PaaS companies have served as a hub for creating web applications and software, IaaS is the main powerhouse for hosting and managing software data. IaaS uses physical servers to host and manage data in the cloud and connect them to PaaS companies through API (application programming interface).
PaaS companies will thereby be paying IaaS companies based on the volume of space they use in helping SaaS companies to host their software. Here are five examples of IaaS companies:
Picking the right cloud computing software for your small business
At a point, you may have to ask yourself which of these cloud computing software you should use for your business. Should you settle for a SaaS product or hire a team of developers to build all the software you should use for your company? Should you host your company software with a PaaS company, or should you go ahead and purchase space directly from IaaS? And lastly, do you think your company is big enough to build its cloud storage like Meta (formerly Facebook) and Walmart?
The simplest answer is that it depends on the size, goal, available resources, and business model. For example, if you are a small or medium-sized business, it will be best to leverage a quarter of a million existing SaaS products for your business activities. With this, you can focus on your business offerings and not constantly spend time and money updating software. Giant companies like Linkedin, YouTube, and hundreds of others still leverage other SaaS companies for their offerings (like using Streamyard to broadcast a webinar on LinkedIn Live, for example).
However, suppose you feel the available SaaS products aren’t effective enough for your company workload or are perhaps less secure. In that case, you may hire a team of engineers to build the software on a PaaS company and connect IaaS like AWS or Google cloud for the cloud storage. For convenience, I often advise using an IaaS company that offers PaaS services like Google Cloud Platform (Google App Engine) and Amazon Web Service (AWS Elastic Beanstalk).
Now that we’ve broken down how SaaS, PaaS and IaaS work, you’ll be able to make a more informed decision on what would be the best route for your business to take. Consider all of the possibilities, and remember to also consider the size, goals, available resources, and your business model before making that decision.
Entrepreneur Editors’ Picks
When His Grandfather’s Farm Was Destroyed By an Invasive Plant, This 17-Year-Old Entrepreneur Came Up With an AI-Powered Solution
Avoid Nightmare Employers and Scams By Job-Searching Like a Journalist
Be the CEO of Your Personal Life in 7 Simple Steps
This Curly Hair Expert Now ‘Cuts’ Hair Online Only — And Says She Is Making More Money Than She Ever Did in a Salon
How to Craft the Perfect Recipe for Persuasive Storytelling in Your Presentations
This Founder Needed to Pivot — Hard — After a Cancer Diagnosis. Now, Her Bootstrapped Makeup Brand Is On Track to Be in 600 JC Penney Stores.
Inflation Is Impacting Some Franchisees More Than Others, But All Are Hurting