Difference Between SaaS & Managed Services

Ronan Short
February 6, 2023

In recent years, businesses have increasingly turned to outsource to reduce costs and improve efficiency. Software as a Service (SaaS) and managed services are two popular outsourcing models. Despite their shared goals, significant differences between these two models are crucial for businesses to understand.

This comprehensive guide will explore the difference between SaaS and managed services, addressing key aspects and answering frequently asked questions on the topic. By the time you finish reading this post, you will have a deep understanding of the differences between these two service models and be able to make an informed decision for your business.

What are SaaS and Managed Services?

Software as a Service (SaaS)

Software as a Service, or SaaS, is a software licensing and delivery model where software is provided over the internet rather than installed locally on a user’s device. With SaaS, users can access the software and its features from any device with an internet connection. SaaS providers typically handle all updates, maintenance, and security, allowing businesses to focus on their core operations.

Managed Services

Managed services, on the other hand, involve outsourcing the management and maintenance of a company’s IT infrastructure to a third-party provider. Managed service providers (MSPs) care for many IT functions, including network management, security, data backup and recovery, and cloud services. Businesses that opt for managed services can rely on their MSP to ensure their IT systems run efficiently and securely and comply with industry standards.

Key Differences Between SaaS and Managed Services

Deployment Model

One of the primary differences between SaaS and managed services is how they are deployed. SaaS applications are hosted in the cloud and accessed via the internet, making it easy for users to access the software anywhere.

Managed services, however, can be delivered through a combination of on-premises, private cloud, or public cloud infrastructure, depending on the needs of the business.

Scope of Services

SaaS typically focuses on providing a specific software solution, such as customer relationship management (CRM) or human resources management (HRM).

Managed services, by contrast, offer a broader range of IT services, encompassing everything from hardware and software management to network security and disaster recovery.

Pricing Model

SaaS providers generally offer a subscription-based pricing model, where customers pay a recurring fee to access the software. This fee often includes updates, maintenance, and customer support.

Managed services, on the other hand, can use a variety of pricing models, such as a flat monthly fee, pay-per-use, or project-based pricing.

Customisation and Integration

SaaS solutions are typically designed to be easily configurable, allowing businesses to adapt the software to their specific needs. However, SaaS solutions may have limitations in customisation and integration with existing systems.

Managed services, in contrast, can be tailored to a company’s unique IT environment and more easily integrated with existing systems and processes.

Level of Control

With SaaS, businesses have less control over the software’s underlying infrastructure, as it is managed by the provider. This can be beneficial, as it reduces the burden of maintenance and updates, but it can also limit the company’s ability to change the software.

In managed services, the business retains more control over its IT environment. The MSP works closely with the company to manage and maintain its infrastructure according to its specific requirements.

Final Words

Understanding the difference between SaaS and managed services is crucial for businesses to make informed decisions about their IT outsourcing needs. SaaS offers an easily accessible, cost-effective software solution with minimal maintenance requirements, while managed services provide a broader range of IT services and greater customisation and control.

By considering the unique needs of your business and evaluating potential providers, you can choose the right solution to support your company’s growth and success.

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Frequently Asked Questions

Which is better for my business: SaaS or managed services?

The best choice for your business will depend on your specific needs, budget, and the level of control you require over your IT environment. If you are looking for a cost-effective, easily accessible software solution with minimal maintenance requirements, SaaS may be the better option. If, on the other hand, you require a comprehensive range of IT services and a higher degree of customisation and control, managed services might be more suitable.

Can I use both SaaS and managed services together?

Yes, many businesses utilise a combination of SaaS and managed services to meet their unique IT needs. For example, a company might use a SaaS CRM solution while also employing a managed service provider to manage its network infrastructure and security.

Are SaaS solutions secure?

SaaS providers invest heavily in security measures to protect their customers’ data. However, it is essential to evaluate each provider’s security measures and compliance certifications to ensure they meet your business’s specific security requirements.

How do I choose a managed service provider?

When choosing a managed service provider, consider their expertise, experience, and the range of services they offer. It’s also essential to assess their customer support, pricing models, and any references or case studies from existing clients.

How do I transition from an on-premises to a SaaS solution?

Transitioning from an on-premises solution to a SaaS solution involves several steps, including evaluating your current IT infrastructure, identifying the appropriate one for your needs, and planning a data migration strategy. Working closely with the SaaS provider and any relevant stakeholders is important to ensure a smooth transition.

How do I know if a SaaS solution is compatible with my existing systems?

Before adopting a SaaS solution, it’s crucial to determine whether it can be integrated with your existing systems. This may involve researching the solution’s compatibility with your current software or consulting with the SaaS provider to understand their integration capabilities.

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*FYI, parts of this blog post were drafted by artificial technlogy. But rest assured, it's been thoroughly researched, edited, reviewed and me & my team.
Ronan Short
Founder @ IT Support 4U

Ronan Short, the founder of IT Support, is a trusted authority in the IT industry, passionate about providing top-tier tech support at IT Support. Dedicated to solving complex problems with simplified solutions, catering to all your SME IT needs with cost-effective solutions.