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Business TransformationIf you’re comparing managed service vs SaaS and unsure which one better fits your business needs, you’re not alone. With a flood of software options in today’s cloud-first world, deciding between using managed services or a SaaS application can feel like comparing apples to oranges. But the truth is, both models serve different purposes—and choosing the right one can significantly impact your business goals.
This guide breaks down the key differences, advantages, and use cases of SaaS and managed services in plain English so you can make a confident, informed decision.
What Is SaaS?
SaaS, or Software as a Service, is a cloud computing model that delivers software applications over the internet on a subscription basis. You don’t have to install anything or manage the underlying infrastructure. All you need is an internet connection and a browser, and you’re ready to use the software.
Some well-known examples of SaaS include:
- Microsoft 365
- Gmail
- Salesforce and other customer relationship management tools
With SaaS, the software provider handles everything—from updates to infrastructure—letting teams focus entirely on using the app.
Key Benefits of SaaS
- Lower upfront costs: No need to buy expensive hardware or licenses.
- Quick deployment: Start using the software almost immediately.
- Automatic updates: The provider manages updates, bug fixes, and new features.
- Scalability: Change your number of users as needed with flexible saas subscriptions.
- Ease of use: Since SaaS is accessed via the web, you can use it on almost any device—perfect for remote work.
Since SaaS delivers software tools via the cloud, many businesses choose it for workflow solutions like email, CRM services, or management tools.
What Is a Managed Service?
A managed service is exactly what it sounds like: IT tasks and services that are managed on your behalf by a third-party provider, often called a managed service provider (MSP).
Instead of doing everything in-house, you outsource the management of IT infrastructure, software, or security operations to a trusted partner.
Think of a managed service as more than just software. It often includes:
- Full management and support
- Managed security services
- Data backups and disaster recovery
- 24/7 monitoring
Using a Managed Service: What It Looks Like
Imagine your company has several on-premise and cloud systems across multiple departments. Managing software, updating systems, ensuring regulatory compliance, and keeping data secure is a tall order. A managed IT service steps in to take care of all that—giving your teams more room to focus on strategic tasks.
This is why managed services often appeal to businesses looking for a fully managed and tailored IT solution aligned to specific business needs.
SaaS vs Managed: What’s the Key Difference?
If you’re wondering what’s the difference between SaaS and managed service offerings, here’s a clear breakdown:
| Feature | SaaS | Managed Service |
|---|---|---|
| Definition | Cloud-based software application delivered via subscription | Outsourced management of IT systems or operations |
| Provider Role | Provides access to a specific software | Provides cloud services, software, security, and IT operations |
| Flexibility | Used as-is with limited customization | Highly customizable to your specific business needs |
| Control Over Infrastructure | Minimal; you just use the software | More extensive; managed services can also manage hardware or cloud setups |
| Support Level | Basic to advanced, depending on the SaaS provider | Comprehensive, 24/7 support, often with a service-level agreement |
| Best For | Quick deployment and standard business workflows | Complex environments, heavy security needs, or legacy system integration |
The key difference is how much control and customization your business needs. While SaaS allows quick access to application software, MSPs take over the software management so you don’t have to worry about anything behind the scenes.
SaaS and Managed Service: Can They Work Together?
Yes—they often do. While they serve different functions, combining SaaS and managed service models can offer the best of both worlds. Many service providers integrate SaaS tools into their broader managed cloud services or use Saas management software to regulate usage, optimize costs, and secure your systems.
For example, a managed security company might help monitor your SaaS applications, ensuring they comply with internal policies and regulatory standards.
SaaS vs Managed Service: Which One Fits Your Goals?
Consider the following factors when choosing SaaS vs a managed service model.
Choose SaaS If…
- You need fast access to a specialized software solution
- You want to use SaaS applications to streamline daily tasks
- Your team is tech-savvy and can handle SaaS sprawl on their own
- You’re solving a specific problem—like deploying customer relationship management tools or adding a mobile app
Choose Managed Services If…
- You need to use managed infrastructure or managed cloud services
- Your team lacks bandwidth to manage security or software
- You want to outsource complex IT tasks to a third-party company
- Regulatory compliance, automation, or risk reduction are priorities
In some situations, starting with a saas application and scaling up to a managed service provider makes sense. Other businesses start with managed services from day one, especially where IT infrastructure is complex or outdated.
Comparing SaaS to Other Cloud Models
If you’re thinking about the bigger picture in cloud computing, it helps to understand how Software-as-a-Service, Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS) fit into the puzzle. For a deeper dive, check out IaaS, PaaS, and SaaS explained.
Managed Services vs SaaS: Which Scales Better?
In terms of scalability, SaaS typically grows easily with your team. When your number of users goes up, you can usually just pay a higher subscription fee and go from there.
But managed services provide deeper scalability when your business environment is highly integrated or technically demanding. For example, if you’re dealing with cloud storage, public cloud, or hybrid environments, opting for msps ensures your systems stay efficient and secure.
When Businesses Use SaaS vs Managed Services
Here are some common scenarios to illustrate the difference between SaaS and managed options in action:
Example 1: Using True SaaS for Collaboration
A medium-size company wants to enable remote work and enhance communication. They use true SaaS tools like Microsoft 365 and online chat applications—hosted via the cloud, accessible anywhere.
Why it works: Fast deployment, low overhead, and standard features for a fixed fee.
Example 2: Using Managed Services for IT Overhaul
An enterprise with legacy systems needs a mind-shift to cloud infrastructure. The team brings in an MSP and SaaS mix to help with virtual migrations, software updates, custom setups, and ongoing guidance.
Why it works: Tailored approach to match unique workflows and tight compliance rules—something SaaS alone can’t offer.
Avoiding SaaS Overload with Managed Services
Using too many SaaS tools without central oversight can lead to saas sprawl—too many applications, conflicting data, and rising costs. This is where managed services are better positioned to help by overseeing and consolidating your saas services, ensuring that you only pay for what you need while maintaining strong security policies.
Whether you’re dealing with new applications or older systems, partnering with a managed service provider helps you keep control.
Plan Ahead with the Right Tools
Whether you decide on SaaS, managed services, or both, planning is critical. At Visual One Intelligence, we help businesses take the guesswork out of capacity scaling with modern solutions like capacity planning as a service. Tools like these ensure that your cloud computing model meets current and future demands—without wasting time or money.
Final Thoughts: What’s the Right Solution for Your Business?
So, what’s the difference between SaaS and managed services? In short:
- SaaS refers to software-as-a-service, where you access applications over the internet for a recurring fee.
- Managed services, on the other hand, involve outsourcing the management of your IT systems to a specialized provider.
Each has its strengths, and choosing the right one depends on your business needs, resource availability, and long-term goals.
If you’re leaning toward SaaS, make sure you understand how each solution fits into your broader tech stack. If your environment is complex or highly regulated, you might be better off using managed services.
Whatever you choose, the future is in the cloud—and it’s growing fast. Stay informed, choose wisely, and align your tools with your business model and strategy.
Want clarity on what solution best matches your workflow and challenges? Reach out to our team or follow our blog for future insights on getting the most from your cloud investments.
