Choosing the Right Cloud Computing Model: Factors to Consider When Deciding Between SaaS and FaaS Solutions

Different service models, such as FaaS (Function as a Service) and SaaS (Software as a Service) are used in the creation of cloud-based software applications. When it comes to handling dependencies and versions, each paradigm has its own set of benefits and drawbacks. Let’s undertake an analysis of both technologies as well as factors which would help you choose the right solution.

SaaS (Software as a Service)

SaaS (Software as a Service) is a cloud computing model where software applications are delivered over the internet on a subscription basis, eliminating the need for local installation and maintenance.

The provider of a Software as a Service (SaaS) solution is responsible for its development, hosting, and maintenance. Small and medium-sized enterprises usually lack the resources to recruit highly skilled developers, network engineers, and administrators, so they can benefit greatly from SaaS solutions.

For instance, SaaS e-Commerce systems allow businesses to immediately have access to the shop, product catalog, admin panel, marketing campaigns, etc. through a web browser (or even a mobile device).

If we consider Shopify as an example, an e-commerce management platform, one can create their own online store and have it operational with just a few tweaks. Many readymade themes and plugins are available that make the process super easy.

FaaS (Function as a Service)

FaaS (Function as a Service) is a cloud computing model where cloud providers manage and execute discrete functions in response to specific triggers or events. FaaS solutions are used when developing microservices such as webapps and chatbots.

FaaS creates a new level of abstraction in which the underlying hardware and software architecture are fully hidden. For large-scale software applications, FaaS considers functions as the smallest units, emphasizing its abstract nature.

Although it is common to use the terms “FaaS” and “serverless computing” interchangeably, “FaaS” is more accurately described as a user-facing software component of serverless computing.

Global cloud service companies provide FaaS platforms, some of the most well-known being Microsoft Azure Functions, Amazon Web Services Lambda, IBM Cloud Functions, and Google Cloud Functions.

FaaS applications are relatively affordable, and this is mainly because one only pays for the server time they use. However, this is usually the case for the simplest of computations. The cost savings in introducing new features will be reduced because of the need to purchase extra services from the cloud provider for more complicated applications like e-commerce platforms.

Factors to Consider when Choosing Between SaaS and FaaS

Businesses need to look at their requirements and need to consider some key factors including the following:

Administrative Overhead

The ease with which a company can administer the cloud infrastructure is the first thing to think about. Additional areas of concern would include

  • Cost of hiring skilled workforce
  • Cost of maintenance of the application

It is worth noting that multiple deployments will be required if the product has a high degree of customization. This necessitates extra work and time required from infrastructure administrators. The Return on Investment (ROI) can be low too, especially for SMBs and it is important it is evaluated before implementation.

FaaS applications usually have more administrative overheads compared to SaaS applications. An organization would require skilled IT staff in FaaS because they are the ones responsible for writing and maintaining the functions, ensuring their efficient operation, and addressing any issues that may arise.

In the case of SaaS, the provider handles the software maintenance, updates, and infrastructure management. You might need technical staff here too, but mostly for implementing and managing the SaaS application effectively within your organization.


Product agility refers to the ability of a software to effectively respond to changing market conditions, customer needs, and business requirements. It involves the capacity to adapt, modify, and evolve the product in a timely manner to stay competitive and meet changing demands.

There are several factors that companies must take into account, such as the level of customization, new business requirements, big modifications, and horizontal and vertical movements.

In terms of agility, SaaS applications offer better agility. When it comes to FaaS, agility is usually limited to individual functions and events.

SaaS applications can be quickly deployed, managed externally, and  typically provide configuration options and customization capabilities to adapt the software to specific business needs. On the other hand, FaaS applications automatically scale resources based on the incoming workload, enabling efficient handling of varying levels of demand.

Case Examples

  1. In the case where a medium-sized e-commerce business wants to quickly launch an online store, SaaS would be better. This is because they want to focus on their core business operations and do not have a dedicated technical team.
  2. On the other hand, consider a scenario where Netflix  implements real-time notifications for its users. The application experiences significant fluctuations in user activity throughout the day, resulting in varying demands for notification processing. In this case, FaaS would be a better fit for agility.

Time To Market (TTM)

Time to Market (TTM) refers to the time it takes from initiation of a product development process to the point when the product or service is available for customers to use or purchase.

Quick time-to-market (TTM) relies on three main factors: rapid development, testing, and release. Instead of worrying about provisioning and deploying, developers can concentrate on writing and testing code for a quicker time to market. No-code or low-code platforms are a viable choice in this context.

SaaS can offer faster TTM when leveraging existing templates and configurations, while FaaS can provide quicker TTM for specific functions or features through its modular and event-driven nature. Moreover, FaaS platforms also provide event-driven triggers which facilitate faster development and responsiveness to real-time events.

Case Example

Let’s say a SaaS platform is used to develop a Customer Relationship Management software. The SaaS platform enables faster TTM for a complete CRM software solution by leveraging pre-built templates and configurations. On the other hand, let’s say FaaS is used to develop a live multiplayer feature in a video game. In this case, the FaaS platform allows faster TTM for a specific feature (real-time multiplayer functionality) by developing and deploying individual functions that enhance the existing gaming app.

In a nutshell, it depends whether you are looking to improve TTM for a particular feature or the entire software.


The degree of control the business will have over the infrastructure is crucial. More management oversight is required if:

  • Multiple applications, data stores, and providers exist.
  • Businesses have a system in which hardware configuration for the customer is required.
  • There must be either runtime isolation or data isolation, but not both, for tenants.
  • Business provides a web-based service or API, and it is aiming to reduce the clients’ software, hardware, and management expenses.

Maximum control is attained with a physical machine or one’s own rack, but this is not the optimal solution for every business. As a result, premium dedicated instances have become the first choice, especially for large businesses. From a management’s perspective, low-code, no-code, and serverless systems provide the least level of control.

FaaS platforms generally provide more control over processes and data than SaaS. Although there is more control over the implementation and deployment of their functions, you get less control over the underlying infrastructure, which is managed by the FaaS provider.

In contrast, for SaaS applications, customers typically have limited control over the infrastructure as they primarily interact with the software application through a web interface.


Expense is undeniably a major element to think about. It might be difficult to take into account all the longterm and shortterm costs, but there are things the business can do to get a fair idea. To name a few: determine break-even thresholds, avoid premature optimization, and minimize fixed expenses.

The upfront hardware and software licensing costs for SaaS are lower than the conventional software as it lives in a shared or multi-tenant environment. Since the cost of licensing prevents many small and medium-sized enterprises from using traditional software, SaaS enables these businesses to quickly get started using an SaaS app with very few barrier to entry. The SaaS provider owns the environment and divides it among all clients that utilize its service, so maintenance expenses are also lowered.

Although the initial cost of using a FaaS solution might be lower in the beginning, it can quickly add up when you take into account the human skills and expertise needed in making it work.

Data Migration

The software industry is consistently producing new and improved cloud-based solutions, so companies need to pay special attention to data migration. Depending on the needs of the client, migration might be necessary. Choose a cloud service that allows for easy data transfers before making any commitments. In case of SaaS, data migration is usually easier and pretty straight forward if the provider supports it. However, in the case of FaaS, data migration is usually not that easy and may require skilled IT personnel with in-depth technical expertise to make that happen.

Data Migration


Businesses need to pay close attention to the integration capabilities when opting for any platform. Integrating an SaaS solution is a pretty straightforward task for the most part. Most vendors offer seamless integrations with a variety of platforms and apps. However, in case of FaaS, things might get a little complicated as the user has to play a major role in ensuring that everything connects seamlessly with other solutions.

Easy to Use

SaaS solutions are usually complete solutions users can start using right after subscription. So it’s a win for SaaS in this category. On the other hand, FaaS requires some tinkering and might not be the easiest to deal with for all businesses, especially SMBs with very few technical resources and know-how.


Businesses in any sector can benefit from using cloud services. In the FaaS model, the customer has very little say over the underlying hardware and and software. But SaaS is great for startups without the resources to set up their own server and data center.  In fact, many SaaS applications are useful for business growth and automation.

Both SaaS and FaaS have their pros and cons and choosing between the two comes down to business requirements, and technical expertise. While SaaS makes sense for most businesses including SMBs, FaaS is go-to option for businesses that want to develop, run and manage app packages as functions while being able to do so without having to setup or maintain their own infrastructure.