What Is The Difference Between SaaS and Managed Services

April 11, 2024

In today’s rapidly evolving digital landscape, businesses are continually seeking ways to optimise their IT operations, ensuring they remain competitive, agile, and secure. As a part of this quest, IT outsourcing has emerged as a pivotal strategy, enabling organisations to access high-quality IT services without the overheads of in-house management.

Among the plethora of IT outsourcing models that have taken centre stage, Software as a Service (SaaS) and managed services stand out for their adaptability, cost-effectiveness, and ease of integration into existing business structures.

SaaS, offering software on a subscription basis over the internet, presents a straightforward solution for businesses looking to utilise essential applications without the complexities of managing the underlying infrastructure.
On the other hand, managed services provide a more holistic approach, encompassing comprehensive IT management—from infrastructure maintenance and monitoring to cybersecurity, facilitating a hands-off approach for businesses regarding their IT needs.

The distinction between these two models, however, extends beyond mere definitions. It encompasses differences in scope, implementation, support, and impact on a company’s IT infrastructure.

By exploring each model’s unique features, advantages, and ideal use cases, we aim to guide business managers and owners in making informed decisions that align with their operational needs and strategic goals.

With that said, it’s important to state that managed services and SaaS are not contradictory, but complementary types of IT services. Managed services is to entrust a company with managing a company’s IT resources, and many of these resources can be SaaS products.

Examples of SaaS products we at Levit8 work with are: Microsoft 365 for Business and Microsoft Teams Phone.

Understanding the Basics of SaaS vs Managed Services

Both types of services offer unique advantages and cater to different business needs. Let’s delve into the fundamentals of each to uncover their distinct features and benefits.

Software as a Service (SaaS)

SaaS is a software distribution model in which applications are hosted by a service provider and made available to customers over the internet. This model offers an alternative to the traditional approach of purchasing software, installing it locally on devices, and managing updates and maintenance.

Businesses leverage SaaS for its ease of access and flexibility. Instead of investing in extensive hardware infrastructure and software licenses, companies can subscribe to the services they need. This allows them to use up-to-date software applications without the complexities of managing them on their servers.

Advantages:

Reduced Implementation Time: SaaS applications are ready to use once the subscription starts, significantly minimizing deployment times.
Cost Efficiency: With SaaS, companies can avoid the upfront costs associated with purchasing software, as well as ongoing expenses like maintenance and upgrades.
Scalability: SaaS solutions can easily scale up or down based on business requirements, offering flexibility as the organisation grows or changes.
User-Friendly: Designed for end-users, SaaS applications often have intuitive interfaces and functionalities, reducing the need for extensive training.

Some well-known SaaS applications include Gmail for email communication, Office 365 for productivity and collaboration, Salesforce for customer relationship management, and Dropbox for file storage and sharing.

Managed Services

Managed IT services refer to the practice of outsourcing specific IT operations and responsibilities to a third-party provider. This comprehensive approach spans across managing and monitoring an organisation’s IT infrastructure, including software, hardware, and various operational tasks.

IT managed services encompass a wide array of services:

Monitoring: Continuous oversight of IT systems to ensure they’re operating optimally.
Security: Implementing robust security measures to protect against cyber threats, including regular updates and patches.
Event Reporting: Providing detailed reports on IT incidents, performance metrics, and other critical information.
Hardware Support: Managing the physical components of an IT infrastructure, including servers, networks, and computers.

Unlike SaaS, which primarily focuses on software, managed services involve a broader spectrum of IT management. This model includes not only the software applications used by a company (which can be SaaS) but also the management of human resources and hardware necessary for the IT ecosystem to function effectively.

Explore more about IT Support Services.

This comprehensive approach ensures businesses have a reliable IT infrastructure that supports their operations without necessitating an internal IT department.

Whether it’s the streamlined access to software applications provided by SaaS or the all-encompassing IT oversight offered by managed services, recognising the unique advantages of each model is key to leveraging technology effectively for business success.

Key Differences Between SaaS and Managed Services

When it comes to optimising your business’s IT operations through outsourcing, understanding the key differences between Software as a Service (SaaS) and managed services is crucial.

Scope of Services

Essentially, SaaS gives businesses access to software applications over the internet. This model is incredibly straightforward, focusing solely on software delivery. Users can log in and use the application from virtually anywhere, without worrying about the underlying infrastructure or maintenance.

Compared to SaaS, managed services offer a more comprehensive package of IT management services. This not only includes SaaS applications but also extends to the broader infrastructure, both hardware and human components of IT operations. Managed services providers (MSPs) take care of the entire IT ecosystem, acting as the IT department for the client organisation.

Explore Levit8’s Managed Infrastructure.

Implementation and Support

The approach of SaaS is primarily focused on software delivery. The vendor is responsible for keeping the application up and running, with support typically limited to issues directly related to the software itself. While user-friendly and quick to deploy, the support for integration with existing systems or customisation may be limited.

Managed services take a holistic approach, offering support far beyond just software. This includes maintenance, upgrades, integration with other systems, and security. An MSP works closely with the client organisation to ensure its IT infrastructure is aligned with its business objectives, offering tailored solutions and ongoing support.

Security and Integration

While SaaS providers invest heavily in security, clients often have limited control over their data’s security, which can be a concern for businesses with sensitive information.

MSPs adopt a proactive stance on security, engaging in constant monitoring and conducting regular risk assessments. They work to integrate the client’s various systems under a unified security framework, ensuring high-level protection and compliance with regulations.

Scalability and Flexibility

Both SaaS and managed services models offer scalability, allowing businesses to adjust their IT resources based on current needs and future growth. However, there are differences in how they provide this flexibility:

SaaS: Provides easy scalability, as users can typically add or remove subscriptions based on the number of users or the level of service needed. However, this model might offer limited customisation, which could be a hindrance for businesses with unique processes or workflows.
Managed Services: MSPs not only ensure scalability in terms of infrastructure but also offer substantial flexibility to customise IT solutions to fit the business’s evolving needs. This makes managed services a more adaptable option for companies that anticipate rapid growth or changes in their IT requirements.

While SaaS offers an accessible and efficient way to utilise software applications, managed services present a holistic approach to IT management, offering comprehensive support that extends far beyond software to encompass infrastructure, security, and strategic IT planning.

Conclusion

The journey through understanding the differences between SaaS and managed services reveals a landscape of diverse IT solutions tailored to different organisational needs.

SaaS offers a direct, cost-effective route to employing software applications, marked by ease of use and rapid deployment. Managed services, on the other hand, deliver a comprehensive IT strategy, from infrastructure management to security, tailored to support your business’s specific operational demands.

Levit8 is Your Trusted Managed Services Provider

Our team of experienced professionals at Levit8 can provide insights and support tailored to your business context, ensuring you choose the IT solution that aligns with your objectives and propels your business forward.

Whether you’re exploring managed IT support, secure cloud computing solutions, or other IT services, Levit8 offers the expertise and resources to ensure your technology investments are strategic, practical, and effective.

Contact us today to discover how we can elevate your IT infrastructure and support your business goals with our custom IT solutions. Let’s navigate the future of your organisation’s technology together.