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SaaS vs SaaP – A look at key differences

by Canto  |  January 19, 2021

3 min. read
A picture of notes on a desk, the top one reads, "Time to evaluate".

Software as a service or software as a product? The solution that’s best equipped to meet your business needs will depend on your operational ambitions. Here we look at what SaaS and SaaP offer and provide insights for you to consider before choosing a solution.

computer screen

What is SaaS?

Software as a service provides online solutions for a monthly or yearly fee or subscription. There are no hard drive requirements and your data is stored on an external server. The maintenance of this web-based server is done by the third-party software you choose for your business. Outside vendors own the software and are responsible for updates and making integrations possible. Cloud-based storage means you are never in danger of overloading internal servers. The cloud also removes data from individual hard drives and makes it more accessible to teams.

3 popular software as a service solutions:

  • Cloud file storage
  • Workflow software
  • Chat applications

two computer screens and a hard drive

What is SaaP?

Software as a product requires a one-time license purchase at a higher fee. This allows users to download a product onto a server and host it themselves. In this sense, there is a physical element to SaaP as it is a product purchase and not a service rental. Once installed it is up to the business or user to ensure product maintenance. Upgrades of a product usually come at an additional cost and your IT team will be involved in ensuring things run smoothly. Internal servers are equipped to accommodate SaaP and offline functionality is sometimes possible.

3 Popular Software as a Product Areas:

  • CRM
  • Virus protector
  • Enterprise resource planning (ERP)

SaaS versus SaaP

Think of SaaS as a car you rent and SaaP as a car you own. If renting a car (SaaS) you choose how much you are willing to pay over a limited timeframe. The changing of tires and other service requirements are done for you and it is up to the third-party owner to make sure the car meets road regulations.

On the other hand, when you own a car (SaaP) you need a place to store it. A car owner has to pay taxes each year and ensure safety regulations are being met. If a newer version of the car is released then the owner has to pay for that upgrade as a one-time fee if wishing to own the latest model. They must also consider what to do with the old model.

Both rental and owned cars have value and it’s important to consider what will work best for your business long-term. Here are three features each software solution has going for them.

3 SaaS features:

  • Cost-efficiency
  • User-friendly and collaborative
  • Scalable

3 SaaP features:

  • Customizable features
  • Enhanced data control
  • Single-user friendly

SaaS logo on a wooden cube

In the modern world agility and scalability are key to the ongoing success of a business. How you build your marTech stack plays a vital role in team efficiency and collaboration. You need a software solution that can keep up with digital advancements, one that doesn’t consume colleagues with manual maintenance.

Where SaaP shines is in ownership. This provides businesses with data control that is kept in-house and improves online security. But the reality is that the simplicity of cloud-based software makes SaaS the likely winner as a scalable business model.