How to Choose the Right Cloud Services: Managed, Hosted, SaaS

The world of cloud computing can be confusing, with many overlapping terms used to describe services. This article clarifies the differences between managed services, hosted services, and Software-as-a-Service (SaaS) to help you choose the right solutions for your business needs.

Cloud Service Providers Offer Building Blocks

A cloud service provider (CSP) is a company that provides services delivered over the internet (aka "the cloud"). These include fundamental building blocks that can be used individually or combined to create customized IT solutions:

• Infrastructure-as-a-Service (IaaS): Provides basic computing, storage, and networking capabilities to allow you to build cloud-based infrastructure. With IaaS, you rent IT infrastructure components from a CSP and assemble them as needed. Leading IaaS providers are:
  • AWS - Amazon Web Services offers a very broad and deep set of IaaS components, including EC2 virtual machines, S3 storage, VPC networking, and much more.
  • Microsoft Azure - A top competitor to AWS, Azure also offers VMs, storage, VPNs, load balancers, and other networking services.
  • Google Cloud Platform - Provides compute engine VMs, persistent disk storage, VPNs, and load balancing.
• Platform-as-a-Service (PaaS): Offers development tools, middleware, and runtime environments to make it easier to build and deploy cloud-based applications without managing the underlying infrastructure. Leading PaaS examples are:
  • AWS Elastic Beanstalk - Provides preconfigured application environments to quickly deploy applications in several programming languages.
  • Azure App Service - Enables building web and mobile apps that scale automatically on the Azure platform.
  • Heroku - A flexible PaaS that supports various languages and frameworks and allows seamless deployment and scaling.
• Software-as-a-Service (SaaS): Provides ready-to-use cloud-hosted software applications that are accessible over the internet. This allows you to use the software without having to develop, install, and run applications on your own systems. Major SaaS services include:
  • Office 365 - The Microsoft suite of office productivity tools delivered via the cloud.
  • Salesforce - The most widely used SaaS for customer relationship management (CRM).
  • Slack - A popular cloud-based team collaboration and communication app.

When selecting from the wide range of CSP services available, it's important to align them with your overall cloud strategy and business objectives. The offerings provide flexible building blocks, but you need an architecture plan to assemble them in a way that meets your specific needs.

Managed Service Providers Offer Complete Solutions

While CSPs provide individual cloud infrastructure components, platforms, and software services, managed service providers (MSPs) deliver fully integrated solutions by bundling, orchestrating, and managing services on your behalf. The MSP handles deploying the necessary services across one or more CSPs and maintains the environment on an ongoing basis so you don't have to build and manage everything yourself.

For example, an MSP might provide a fully managed database-as-a-service that runs on AWS infrastructure. The MSP would handle provisioning the virtual machines, installing the database software, configuring networking and security, managing backups and redundancy, monitoring usage, and more. You just interact with the database as a service without worrying about the underlying infrastructure or platform.

Many of the leading CSPs including AWS, Azure, and Google Cloud offer managed services in addition to their core offerings. There are also many third-party MSPs that provide managed solutions across multiple public clouds.

Key Benefits of Managed Cloud Services

Opting for managed cloud services instead of taking a DIY approach provides some key benefits:

• Reduced IT workload - MSPs handle time-consuming tasks like server patches and upgrades, storage management, network health checks, backup logistics, and security monitoring. This lightens the load on your in-house IT staff.
• Access to expertise - MSPs have deep technical expertise from managing services at scale across many customers. This can be more cost-effective than training or hiring highly specialized professionals.
• Proactive maintenance - MSPs continually monitor performance and availability to optimize and tune the environment proactively. This reduces the risk of outages and improves reliability.
• Faster deployment - Managed services are ready solutions that can be deployed quickly and easily without extensive in-house effort.
• Cost optimization - MSPs can ensure workloads are running efficiently and help control expenses. Their economies of scale also allow access to enterprise-grade solutions at lower costs.

For many organizations, handing operations and maintenance off to an MSP can provide access to robust, enterprise-class IT solutions without overtaxing internal resources. The managed services model is designed for convenient, turnkey adoption of cloud solutions.

Comparing Hosted Services vs. Managed Services

Hosted services and managed services are related but have some important differences:

Hosted Services	Managed Services
Dedicated infrastructure that is customized for and resides on the premises of one customer, or infrastructure leased from a provider's data center.	More standardized solutions built on a shared infrastructure that can serve multiple customers.
Provider provisions and maintains infrastructure tailored specifically to the needs of one customer.	Provider defines and controls the architecture while delivering it as a service to customers.
Custom-built network connections to integrate on-premises systems.	Internet-based connections and interfaces to access services.
Requires close collaboration and customization.	Less customization since solutions are designed to be more turnkey.

In summary:

• Hosted services involve dedicated, custom-built infrastructure and architectures.
• Managed services provide more standardized solutions delivered from shared infrastructure.

Hosted services allow customization and optimization for specific customers, while managed services sacrifice some customizability for ease of delivery and consumption across many customers.

Comparing SaaS vs. Managed Cloud Services

SaaS and managed cloud services are two different models for consuming cloud computing:

SaaS	Managed Cloud Services
Provides access to complete software applications over the internet through a browser or lightweight client.	Provide building blocks of infrastructure, platforms, and software to create your own solutions.
The SaaS provider completely manages everything needed to deliver the application.	Give you more flexibility and control to build and manage applications and infrastructure.
SaaS allows you to use applications without managing underlying infrastructure or platforms.	Help deploy and run applications, databases, networks, and more on managed infrastructure.
Suited for common applications like email, office productivity, CRM, etc.	Useful for core systems of record and custom applications.

In summary:

• SaaS provides turnkey access to cloud-hosted software applications.
• Managed cloud services help you build and run your own tailored applications and infrastructure.

SaaS is suited for common software functions, while managed cloud services support core business systems and custom solutions.

Choosing the Right Cloud Model

With the wide range of cloud service models available, it's essential to match solutions to your specific business needs and capabilities:

• For basic infrastructure building blocks, leverage CSPs like AWS, Azure, and Google Cloud.
• For complete solutions without managing the underlying complexity, use MSPs.
• For customized infrastructure and architectures, opt for hosted services.
• For lightweight access to common applications, choose SaaS services.
• For core business systems and custom applications, use managed infrastructure and platform services.

There is overlap between these models, so analyze your requirements, resources, and readiness. With the right cloud partnership and service mix, you can drive innovation and digital transformation. A cloud services strategy tailored to your organization's specific objectives will maximize business impact.