HomeLaw BlogSaaS vs PaaS (Differences: All You Need To Know)

SaaS vs PaaS (Differences: All You Need To Know)

SaaS stands for “Software as a Service” where you pay to use a software solution whereas PaaS is “Platform as a Service” where you pay to use a platform to build your own software.

Keep reading as we have gathered exactly the information that you need!

Let me explain to you what SaaS and PaaS mean!

Are you ready?

Let’s get started!

What Is SaaS And PaaS

Following the COVID-19 global pandemic, the “cloud” has become a hot topic in the business world.

Businesses that were originally hesitating to adopt a cloud strategy have finally decided to dive in head first.

However, before going cloud, you must understand what you are getting into. 

You are here as you are interested in the key differences between SaaS and PaaS.

Before I get into the differences between SaaS and PaaS, let’s first understand the meaning of SaaS and PaaS.

SaaS Meaning

SaaS is short for “Software as a Service”.

SaaS represents one of the most common types of cloud services offered by businesses in the market today.

In essence, “software” as a “service” means that you are paying to use a certain piece of software, typically hosted by a software vendor, in a cloud environment.

Examples of SaaS solutions are Salesforce, WebEx, Office 365, and Dropbox.

SaaS solutions are designed to run through your web browser without the need for a complicated downloading and installation process.

You can also have SaaS services where you download a desktop version of the software allowing you to use the software as if you were running traditional software installed on your computer.

Paas Meaning

PaaS is short for “Platform as a Service”.

PaaS represents another type of cloud service that can be offered to individuals and businesses.

In essence, “platform” as a “service” means that you are paying a certain fee to use a certain platform or framework allowing you to build and use your own applications or software.

Examples of PaaS solutions are AWS Elastic Beanstalk, Windows Azure, and Apache Stratos.

Typically, developers will purchase PaaS solutions to build and customize their own applications leaving the servers, storage, and networking to be handled by a third-party vendor.

The idea is to purchase a platform that is configured in such a way as to allow you to build an app or software.

Now that we have defined the meaning of SaaS and PaaS, let’s look at their key differences.

Recommended article: What is a SaaS contract

Differences SaaS vs PaaS

Let’s look at the main differences between a SaaS solution and a PaaS solution.

Main Purpose

SaaS solutions are primarily designed to allow you to use a software solution or application through the web.

In other words, the vendor takes care of all aspects relating to the management of software, technical issues, data management, servers, storage, bugs, support, and maintenance.

From the client’s perspective, you don’t need to have an IT resource to manage and install the application for you.

SaaS is intended to be “plug and play”.

You will pay a fee in exchange for the right to use the software over the web for a certain period of time.

PaaS solutions are very similar to SaaS where they are offered through the web as well.

This time, instead of paying to use a specific application, you are paying to use a platform allowing you to create a software solution of your own.

The platform is convenient for developers as the third-party vendor manages the server, platform operating system, hardware, software updates, and all other aspects relating to the management of the platform and its infrastructure.

Businesses sign up for PaaS to design and build specific applications allowing them to have access to a platform that is highly available and scalable.

You will pay a fee in exchange for the right to use a platform allowing you to design, build, and use your own custom applications.

Delivery of Services

A SaaS solution is a software product that is “rented” to you for a certain period of time.

In a SaaS engagement, the software vendor will handle essentially all the tedious tasks related to the software, its deployment, update, support, and maintenance.

In other words, the vendor will handle the servers, manage the software upgrades, provide you with technical support, ensure the software is highly available, resolve software bugs and incidents, and so on.

Similarly, in a PaaS engagement, the platform vendor will handle all aspects relating to the management of the platform starting from the operating system used, to servers, and hardware.

The vendor is in charge of the platform but not the software or application that you will run on its platform.

PaaS solutions offer cost-effective methods for the development and deployment of software and apps, are scalable, highly available, and allow businesses to focus on software development without having to deal with infrastructure-related issues.


A SaaS solution will have the following characteristics:

  • It is managed from a central location
  • It is hosted on a third-party vendor’s server (but can be operated in a private cloud as well)
  • The software is accessible over the Internet or using a secure connection
  • The vendor is in charge of software and hardware updates

A PaaS solution will have the following characteristics:

  • Allows the user to scale up or down the resources needed as business needs change
  • Allows the user to develop, test, and deploy custom software or apps 
  • Allows many users to access the same development infrastructure 
  • Is accessible to users over the web

Recommended article: What is a Terms of Use

When To Use SaaS vs PaaS Solutions

If you’re in business today, it’s important to understand when you should use a SaaS or PaaS solution.

Businesses that use SaaS solutions are mainly driven by the need to reduce the time and money spent on tedious tasks such as software installation and network management.

For example, a startup will see a lot of value in purchasing a SaaS solution instead of having to spend time, energy, and money to purchase, install, deploy, and maintain their own software.

SaaS solutions are also quite beneficial for short-term projects requiring a specific type of software solution.

In this context, you can purchase a software subscription allowing you to use the software that you need for a certain period of time. 

Other advantages of using SaaS solutions are that you can deploy software without having the need to dedicate a lot of IT resources, you can use the software without having the expertise to manage it on your own, and you can have software accessible online or via mobile, and you can stop using the services when the software is no longer needed.

On the other hand, businesses that are looking to design, build, and deploy their own software will be great candidates for a PaaS solution.

Since PaaS vendor takes care of the servers and infrastructure, companies can purchase the exact platform they need based on their requirements so they build their own custom software.

The PaaS solution will also allow businesses to streamline their development workflows and allow several developers to work on the same project in an efficient manner.

In addition, a client can quickly scale the platform resources up or down as business needs shift over time.

This will help businesses save money and reduce their overall development and deployment costs.

Recommended article: What is a Statement of Work

SaaS vs PaaS Limitations

While both the SaaS and PaaS engagements provide great advantages, it’s important to consider their limitations as well.

Here are the main drawbacks of a SaaS solution:

  • The solution may not be interoperable with other applications or software
  • You may be locked in with the vendor as migration to another vendor may be difficult
  • The vendor may not provide you with the level of support services that you expect
  • The vendor does not take appropriate data security measures to protect your data
  • Your data is hosted on a third-party’s server where you don’t have control
  • The software cannot be customized to suit your specific needs
  • You do not have control over the third-party vendor
  • The software solution may not have the features that you need
  • The vendor’s system may not perform well over the Internet
  • You may face important downtime and outages 
  • You may still need to pay to have the solution implemented or integrated with other solutions you use in-house

Here are some of the main drawbacks when using a PaaS solution:

  • You may be developing IP-generating material on a third-party server exposed to security risk
  • Your vendor may not have proper security measures in place
  • Your PaaS solution does not integrate well with other solutions or databases
  • You are locked in with the vendor as it may be difficult to port over your services to another vendor
  • If you have created custom software, you may have issues when the server or infrastructure is updated
  • You may run into runtime issues if your platform is not properly optimized
  • You may not be able to create the workflows and automation to suit your needs

Recommended article: How to protect your trade secrets


So there you have it folks!

What is the difference between SaaS and PaaS?

In a nutshell, SaaS refers to “Software as a Service” whereas PaaS refers to “Platform as a Service”.

Software as a service, as the name suggests, is when you pay to use a software solution accessible through the Internet.

A platform as a service is similar to SaaS as it allows you to access a platform through the web where you can develop and manage your own software.

SaaS is generally used by companies and individuals having the need to use a specific type of software whereas PaaS is used by more sophisticated individuals and companies who use the platform to build and design their own software.

Whenever you are negotiating a SaaS agreement or PaaS agreement, you should make sure that you consult with a qualified attorney to help you understand your rights and obligations.

I hope that this article helped you better understand how SaaS differs from PaaS solutions.

Good luck!

SaaS meaning
PaaS meaning
SaaS vs IaaS
API meaning 
SaaS vs Managed Services
Disaster recovery
High availability 
Support SLA
Enterprise Resource Planning


Latest Posts

Editor's Picks