IoT: PaaS versus SaaS

Issue 6 2022 Infrastructure

Anna Branquinho.

Previously, we examined what constitutes an Internet of Things (IoT) platform and what the environment and its components entail. In this article, we turn our focus to why companies should consider investing in platform-as-a-service (PaaS) or software-as-a-service (SaaS) when it comes to launching an IoT application.

PaaS – the customer buys everything

PaaS offerings account for approximately 20% of global cloud services. As the name suggests, a PaaS environment provides the business with everything from the runtime to middleware and operating systems. It delivers the building blocks to do most things required from an IoT system. If building an IoT application were compared to baking a batch of brownies, PaaS offerings are similar to providing a baker with all the ingredients and all the tools, but not necessarily giving them the measurements or a recipe to follow.

Thus, it remains up to the organisation to ‘develop a recipe’ and build the code to unlock the potential of their IoT application. This is very much a do-it-yourself solution. And although many service providers advertise PaaS offerings as ‘easy’ DIY IoT solutions, there is a fair amount of expertise and knowledge required to know how disparate elements fit together and exactly how to integrate each layer of IoT.

Even though the company does not have to focus on the underlying infrastructure needed for IoT, it must create an environment in which the hardware and software integrate and deliver on business requirements. Despite significant upfront investment in terms of resources – from hardware and software experts – going the PaaS route means the company can customise everything according to its unique needs, with costs coming down once the environment is operational.

The big cloud providers like Amazon Web Services, Microsoft Azure and Google Cloud all provide PaaS IoT offerings. Yet, it remains up to the organisation to get the specialist skills in place to deliver an optimal working system. And just like baking brownies from scratch, there will likely be some flops until a winning recipe is produced.

SaaS – on-demand access, but only when you need it

Expected to grow at 11% annually to 2028, the global SaaS market was valued at almost $166 billion at the end of 2021. Think of SaaS as a cloud service where applications are delivered virtually.

If we compare this to the baking analogy, it is similar to buying all the ingredients for the brownie but handing over the grunt work and the baking rights to a private chef to make it for you.

Even though customisations are possible, SaaS is not as flexible as PaaS. With a PaaS offering, you are baking the brownies yourself according to how you like it, right down to the proverbial metric tablespoon. When it comes to SaaS offerings, although you picked out the ingredients, you have limited say on how you would like your brownies to be prepared. However, unlike the former, SaaS requires less software development and maintenance work, as the service provider takes care of that for your business so you do not have to. What this does mean, however, is that there may be limited flexibility to build customised business logic.


IoT platforms can be used to manage many different elements within an application: from managing each ‘layer’ like connectivity or device management, to building unique rules-engine-based applications that use internal logic to leverage data into actionable insights.

Whether a company is going the PaaS or SaaS route, the cloud and infrastructure environment delivers the virtual plumbing to create an IoT platform capable of dealing with immense load to meet a company’s IoT needs. All that is left for the organisation is to introduce its customised services on top of the foundation provided by the cloud services providers.

Having an IoT platform to operate from can inject a level of efficiency and productivity into processes which was previously not possible by remaining with a traditional, on-premises approach. Most importantly, an IoT platform built in the cloud delivers hands-off efficiency that enables businesses to improve their own customers’ experience – essential in today’s digital market. PaaS and SaaS are your most common offerings but let us not forget IaaS, aPaaS and DCaaS. That is something to discuss on another day.


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