From a multinational corporation to a mom-and-pop bakery, almost every type of business is getting harder and harder to imagine without cloud services.

Not without good reason: cloud service users not only significantly reduce infrastructure software maintenance costs, but also flexibly respond to any changes through elastic computing.

Depending on its objectives, a company can use an existing cloud service, also known as SaaS (Software as a Service), or it may need to use a PaaS (Platform as a Service) or IaaS (Infrastructure as a Service) model to create its own unique solution that meets its requirements.
In this article, we will analyze the concepts of SaaS, PaaS and IaaS and find out which models are most suitable for different business types and sizes.


Cloud services: why are they so trendy

Clouds offer a flexible model of access to various resources - from servers and databases to off-the-shelf applications.

The user gets the necessary resource by subscription, and the provider ensures smooth operation.

The wide popularity of cloud services is explained by their main advantages:

Profitability. You only pay for the resources and capacities that you use. Unnecessary sources are released automatically, and in case of additional load, new ones are put into operation quickly. Moreover, a huge part of the technical work, such as setting up and maintaining the service, is entirely the responsibility of the provider, hence you are exempt from the cost of hiring maintenance technicians.

Flexibility. Cloud services are easily adaptable to any business’ needs. Adding new features, removing unnecessary functions, fast scaling - cloud services deliver easy product adaptation to new market conditions. If necessary, one cloud model can be easily and quickly replaced by another, and all this without huge financial investment.

Safety. The technologies and approaches used in cloud models bring the highest security standards, proven by millions of users around the world. By creating new services, providers are improving approaches and making cloud models even more reliable.

According to Gartner,  worldwide public cloud service revenue in 2019 was $227.8 billion. Increased needs for new communication tools caused by the COVID-19 pandemic and quarantine are stimulating сloud services’ growth: experts predict that by the end of 2020, revenue will be about $266.4 billion.


Worldwide Public Cloud Service Revenue Forecast

SaaS, PaaS and IaaS: what’s the difference?

Today the cloud services market consists of 3 main levels.


Difference of SaaS, PaaS and IaaS

IaaS (Infrastructure as a Service) is a base of cloud solutions, according to which the user receives server infrastructure, communications, storage, and all the software necessary for work.

Basically, you buy computing resources from a provider, hence you do not need to bear the cost of your own hardware. IaaS allows you to create unique business solutions with all the benefits of cloud technologies. If you decide to use the IaaS model, you will need a team of engineers to maintain the infrastructure and highly qualified developers to create and configure software following the requirements.

PaaS (Platform as a Service) is the middle level of cloud solutions where the user receives a ready-made software environment for developing and testing their products, placing backup sites, and transferring part of the workload from a private cloud to a shared cloud and back. Unlike IaaS, PaaS includes server-related work, load balancing, DNS, etc., so you do not need to hire engineers to maintain the infrastructure. However, the need for a team of developers who will work on the product remains.

SaaS (Software as a Service)  is the last level of cloud solutions. It provides the user with access to an off-the-shelf application. Typically, such applications have several basic packages with different functionality, and you can choose the version most suitable for your needs. However, you cannot change the functionality of the application. Here you are dealing with an off-the-shelf application fully serviced by a provider, that is why you will need minimal resources to maintain SaaS.

SaaS is a simple solution that can be used immediately and without too many resources. However, its functionality is limited, and you cannot modify them.

Therefore, for some companies’ tasks, an off-the-shelf service is not enough, and a custom solution such as PaaS or IaaS may be required. PaaS is suitable for creating solutions within the existing infrastructure, while IaaS will allow creating a unique piece of software without any restrictions.


What type of cloud service do you need

The choice between an existing model and a custom solution is based on the company’s type and scale, as well as on what tasks the cloud service has to solve.


I - Growing companies

As a rule, the basic functions of SaaS solutions are quite enough at the start of a business, when growth and scaling are a distant prospect.

A young firm can use SaaS apps for almost any task - from communication and project/team management to the automation of internal business processes and marketing and sales objectives.

As usual, SaaS is quite suitable for corporate mail, video conferencing applications, ERP and CRM systems, website builders, etc.

Using ready-made solutions, the company receives:

  • full provider support, which means exemption from the cost of hiring server maintenance technicians, hardware and software upgrades, etc.;
  • different levels of user access and permissions;
  • the ability to quickly change pricing plans and adapt the SaaS solution to changing business needs.

While the functions of an off-the-shelf solution can cover basic tasks in a business’s infancy, these functions are no longer enough when it becomes an industry giant. The product will grow and scale, the issues will become more difficult, and a custom PaaS or IaaS solution will be required to resolve them.


II - Mid-sized and enterprise companies

The PaaS model brings an environment for developing, testing, and deploying your own applications. Based on PaaS, a company that has grown to mid- or enterprise-size can develop a unique application to solve specific business issues.

The size of a company does not necessarily mean that using a custom solution is mandatory. For some tasks, such as work with office documents, internal communications, corporate mail, etc SaaS solutions may still be suitable, however, a custom product is now required to effectively solve core tasks.

Here are the top 5 signs that you need a custom solution, such as PaaS or IaaS:

  • the service package provided by a SaaS does not meet the increased user needs or business objectives;
  • due to the increase in the number of customers, users, orders, etc., the (server) load has increased, which the SaaS app cannot cope with;
  • the company plans to launch a new unique product, and its implementation is possible only through a custom cloud solution;
  • the non-core business line of the company, which was previously covered with a ready-made solution, was scaled and became the main one, and a custom solution is needed to cover new tasks;
  • the company is improving the product by adding new functions into it, but the implementation of features through a SaaS is technically impossible.

The examples listed above are just a handful of the thousands of unique cases.

In fact, the choice depends on how confidently you can answer the question: "Is a ready-made solution enough to solve all my problems now?". If you are in doubt about the affirmative answer, it is a strong case for a custom solution.


III - Tech Startups

For enterprises as well as technical startups, SaaS is quite suitable for accomplishing basic tasks (internal communication, project and team management, etc.).

However, if you are creating an innovative technical product, it is obvious that a SaaS is not your best option, and a custom solution needs to be developed.

Which model to choose for developing a unique product - PaaS or IaaS - depends on whether you need to influence its infrastructure or not.

In the PaaS model, you get the computing platform and solution stack, but you cannot change the virtual infrastructure configuration. This function is usually not enough to create a unique high-tech product, and the IaaS model is the most suitable choice here.

In the meantime, a custom cloud solution for tech startups may concern not only the product itself but also additional features (for example, sales platforms and internal CRMs). The most outstanding advantages of complex custom solutions are optimal interoperability and flexibility, which off-the-shelf software is unlikely to be able to boast.

Before starting work, make sure you have enough experts on your team who are both technically strong and enthusiastic about your idea. This way, you will provide yourself with an excellent foundation for the success of the future product.


Conclusion

When it comes to solving typical tasks with a light load, a SaaS is perfect. The basic functionality of the ready-made services with its relatively low cost will be an excellent solution at the start of a business, and it will also be useful for larger businesses in supporting non-core business activities.

Custom cloud solutions come into play under more serious conditions: when you start a tech startup, allow your product to grow, or want to accomplish the complex tasks of an enterprise or mid-sized company. One way or another, the decision to choose between an off-the-shelf and custom solution depends on the specific tasks and business goals that need to be achieved.