Tech decisions sometimes can feel overwhelming. This is especially true when you are faced with so many new terms like Managed Services and Software as a Service (SaaS).

These two IT solutions promise to streamline your operations, but in very different ways.

Managed services have been a game-changer for many organisations.

Linix mentions that research by CompTIA reveals that 46% of businesses using managed services saved at least 25% of their IT budgets by outsourcing application management.

For businesses looking to replicate such success, managed IT services can also offer tailored solutions that align with local market needs.

On the flip side, SaaS solutions are driving productivity gains across industries, with 54% of companies choosing these tools specifically to boost their efficiency, according to Devsquad.

These statistics paint a compelling picture, but they also raise an important question: Which solution is right for your business?

Understanding their unique features is crucial for making a choice that will support your business growth and protect your bottom line.

This article will help you understand the key differences between Managed Services and SaaS. We’ll look at important factors like security, cost, support, and ease of use. By the end, you’ll be better equipped to choose the right option for your business.

Are Managed Services and SaaS the same thing?

No, managed services and SaaS are different, even though both aim to help businesses with their IT needs.

Managed services are when you hire a company to take care of your IT for you.

This company, called a Managed Service Provider (MSP), handles things like your network, security, data backups, and tech support. They keep an eye on your systems to fix problems before they cause trouble.

SaaS, or Software as a Service, is different. It’s when you use software over the internet instead of installing it on your own computers.

You usually pay a monthly or yearly fee to use the software. Examples of SaaS are software like Salesforce for customer management or Google Workspace for email and documents.

So, to put it simply, the main difference lies in the nature of what you’re getting.

Managed services are provided by human IT professionals who actively manage and support your technology needs.

These experts handle a wide range of IT tasks, from network maintenance to cybersecurity, offering a personalised approach to your business’s tech challenges.

On the other hand, SaaS (Software as a Service) is a digital product—software that you access over the internet.

It’s a ready-to-use tool designed to perform specific functions, like customer relationship management or project planning.

With SaaS, you’re not hiring a team of IT professionals; instead, you’re subscribing to a software solution that you can use right away.

More in Nexalab’s blog: SaaS vs. On-Premise: Which Software Deployment Model Should You Choose for Your Business?

How do Managed Services and SaaS differ?

Security and Compliance

Managed services often offer more thorough security.

They can create custom security plans that fit your specific business needs and follow industry rules. They usually have teams dedicated to staying up-to-date with the latest security threats.

SaaS providers also offer security, but it’s usually more standard.

They build security features into their software and follow common industry standards. However, you’re often responsible for setting up security features correctly. This can work well for businesses with simple security needs but might not be enough for those with complex requirements.

Reliability and Performance

Managed services providers actively work to keep your systems running smoothly.

They watch your IT setup around the clock and try to fix problems before you even notice them. They can also fine-tune your systems to work better for your specific business needs.

SaaS applications are usually very reliable because they run in the cloud.

But their performance can be affected by things like your internet connection or problems with the provider’s servers. While SaaS providers usually promise high uptime, you have less control over how well the software performs compared to managed services.

Support and Maintenance

One big advantage of managed services is the comprehensive support they offer.

You often get a dedicated account manager who understands your business needs. They handle all aspects of keeping your IT running, from updating software to replacing hardware.

SaaS providers typically offer more basic support, like email or chat help. They take care of all software updates on their end. This can be convenient, but it might not be enough for businesses with complex IT setups or unique needs.

Cost Considerations

Managed services often cost more upfront but can save money in the long run by improving efficiency and reducing downtime. They usually charge a fixed monthly fee based on the services you need and the size of your business.

SaaS applications typically use a subscription model.

You pay based on the number of users or the features you need. This can be more predictable and easier to adjust as your needs change. However, costs can add up quickly if you need multiple SaaS tools to run your business.

Accessibility and Mobility

SaaS applications shine when it comes to accessibility.

You can use them from anywhere with an internet connection, making them great for remote work or businesses with teams in different locations. This flexibility allows for easy collaboration across various devices.

Managed services can also support remote work, but it might require more setup. MSPs can create secure ways to access your systems from anywhere and integrate cloud services to improve mobility. However, this usually takes more time to set up compared to SaaS applications.

Pros and Cons: Managed Services vs. SaaS

Pros of Managed Services

Managed services provide a complete solution for IT management and support. They provide custom solutions tailored to your specific challenges and goals.

One of the key benefits is proactive problem-solving, where issues are often identified and resolved before they impact your operations.

Managed services also offer strong security and compliance capabilities, with dedicated teams staying up-to-date on the latest threats and regulations.

While the initial investment may be higher, there’s potential for significant long-term cost savings due to improved efficiency and reduced downtime.

Cons of Managed Services

The primary drawback of managed services is the higher upfront costs, which can be substantial, as you’re essentially hiring an external IT department.

There’s also a risk of becoming dependent on the provider, which can make it challenging to switch if needed.

The setup process for managed services can be lengthy, as custom solutions need to be implemented and integrated with your existing systems. This longer implementation time might delay the realisation of benefits for your business.

Pros of SaaS

SaaS solutions shine in their ease of use and quick implementation.

Most SaaS tools can be up and running in minutes or hours, not days or weeks. They typically offer predictable monthly or yearly costs, making budgeting more straightforward.

Automatic updates ensure you always have access to the latest features without any effort on your part.

The cloud-based nature of SaaS allows for easy access from anywhere, facilitating remote work and collaboration. Scaling up or down is usually straightforward, allowing you to adjust your subscription as your business needs change.

Cons of SaaS

While SaaS offers many benefits, it also has limitations.

Customisation options are often restricted to the features and workflows the software provides, which might not perfectly fit your business processes.

There may be data security concerns as your information is stored on the provider’s servers, potentially raising privacy issues for some businesses.

SaaS tools are dependent on internet connectivity, which could be problematic if your connection is unreliable. Lastly, while individual SaaS subscriptions might seem affordable, costs can quickly add up if you’re using multiple tools, potentially leading to unexpected expenses.

So, which one to choose? Managed Services or SaaS?

To decide whether to use managed services and SaaS isn’t about the technology—it’s about aligning your IT strategy with your business goals, resources, and operational needs.

Both options offer unique advantages, but they serve different purposes. To make the right choice, you need to carefully evaluate your current IT capabilities, future growth plans, and the level of control you want over your technology infrastructure.

Consider Managed Services when

• You need full IT support: Your business requires end-to-end management of IT infrastructure, including hardware, software, and network systems.
• You need security or compliance: you operate in a highly regulated industry or handle sensitive data that demands specialised security measures and ongoing compliance management.
• Proactive IT maintenance is a priority: You want to prevent IT issues before they occur, minimising downtime and ensuring smooth operations.
• You have a hybrid IT environment: Your business uses a mix of on-site and cloud systems, requiring integrated management and support.
• Personalised IT management is preferred: You value having a dedicated team that understands your unique business processes and can provide tailored IT solutions.

Choose SaaS when

• You only need software: You require particular applications or services rather than full-scale IT management.
• Accessibility is key: Your workforce is distributed or mobile, necessitating easy access to tools and data from anywhere, at any time.
• Rapid deployment is essential: You need to implement new software solutions quickly without extensive setup or configuration.
• Predictable, subscription-based pricing is desired: You prefer a pay-as-you-go model with clear, regular costs that can be easily budgeted.
• IT needs are straightforward: Your business doesn’t require extensive customisation or complex integrations for its software tools.

You can make a well-informed decision that supports your business goals and positions you for long-term success in the digital environment by carefully weighing these factors.

More in Nexalab’s blog: How SaaS Plays a Key Role in a Modern Company’s Operations

Conclusion

To sum it up, managed services are provided by IT professionals who actively manage your technology needs, offering personalised support and handling a wide range of tasks. SaaS, on the other hand, is software accessed over the internet, ready to use for specific functions, and easily accessible from anywhere.

If your business relies on SaaS solutions, there is a risk of SaaS sprawl. It is a term that describes when your software subscriptions go out of control.

When that happens, a SaaS management platform can make a big difference.

Octobits by Nexalab is a SaaS management platform designed to address these challenges. It can help you manage your software more efficiently, reduce costs, and improve security across all your SaaS tools.

Whether you primarily use SaaS applications, managed services, or a combination of both, Octobits can streamline your IT management process and optimise your technology investments. Contact Nexalab today to learn how Octobits can help your business.