Managed Services vs. SaaS: What’s the Difference?

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SaaS has increasingly become the standard in modern enterprise. While the concept was somewhat obscure to all but early adopters just a decade or so ago, the benefits of software as a service are now well known — and impossible to deny.

For anyone who may need a quick refresher, SaaS is essentially the concept of software being delivered via the cloud for easy access, quick use, and ongoing scalability. It gives businesses the ability to adopt and implement software without having to organize local installations, and the app-like nature of the software makes for speedy training and easy updates. In virtually any case these days, SaaS makes
for a more convenient way of implementing software programs; in the best of cases, it can vastly improve the efficiency of business practices and growth.

Even given these advantages however, an interesting alternative has become popular in recent years as well. Many businesses today have come to regard managed services as something of an updated version of SaaS, at least where certain needs are concerned. But what are actually the differences between the two?

Ongoing Support

The primary difference between SaaS and managed services is that the latter involves ongoing IT support. Essentially, a business employing managed services can take advantage of SaaS with the added benefit of outsourced assistance with certain aspects of a given software’s function. Either the software provider or a third-party company will take care of certain practices, such that from the business’s perspective the software — to some degree — runs itself. This works differently for different applications; a communication software platform won’t require much in the way of external management for instance, whereas a cybersecurity program may benefit from outsourced monitoring. But the key
difference in general is the ongoing support involved in managed services.

 

Professional Involvement

It’s something of a given provided the notion of ongoing support. But some business leaders do like the idea that trained professionals will be involved in managing their software systems via managed services. This option has become trendy enough that it’s actually drawn a lot of people into online certification and degree programs that train them for work in the field. As a result, lots of the people software companies employ to work in network specialization, system administration, and other aspects of IT support have obtained an online bachelor’s in management information systems, or similar certifications. To some in business making decisions about software and support, the knowledge that trained professionals are on hand to help expands on the reassurance offered by managed services.

 

Hardware Updates

It’s not always mentioned, but another perk of managed services is that hardware updates can also come into play. While the general concept of SaaS and managed services is to make business practices more efficient, and provide seamless tech integrations and updates, the bottom line is that there are occasional needs for coinciding hardware updates. In managed service arrangements, providers and/or
third parties will be available to physically update the hardware if and when it’s necessary, as well as ensure that the software is up and running smoothly on new equipment.

 

Budget Consolidation

Beyond the services and expertise offered, managed services also allow some larger businesses and organizations to consolidate their budgets in a convenience way. This was made clear in an interesting write-up on managed services in higher education, wherein it was pointed out that such services are good solutions for stretched IT budgets and staffing limitations. By trusting software, hardware, and service to a single arrangement, an organization like a university can trim up-front equipment costs, reduce the need to staff IT experts, and avoid complicated webs of IT costs. In this way, larger organizations can rely on managed services to make things more convenient and — in a sense — more affordable.

 

Greater Total Expense

Despite the previous point about total affordability, it should also be noted that in a direct comparison, managed services are more expensive than SaaS. Basically, businesses need to pay for the extra support that defines the difference between the two. It remains the case that implementing managed services across a larger company or organization can cut total costs in certain ways. But directly, managed services do come with an extra cost as compared to SaaS.

Ultimately, neither form of service is better or worse than the other. From a provider perspective, it’s worth considering that managed services may represent the way of the future — another new skill or service that may be helpful in securing contracts moving forward. Where clients are concerned though, the difference between SaaS and managed services comes down to need. Managed services may effectively be viewed as an updated version of the concept, but there are still some organizations that only really need SaaS — at least for now. 

 

Article specially written for saasysalesleadership.com
By Alicia Gregory

Meet the Author

Alicia Gregory is a business and IT blogger. She has made it her mission to break down key components of business and IT to make them easy to understand. In her free time, she loves to walk her golden retriever.

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