The difference between SaaS (Software as a Service) and PaaS (Platform as a Service) lies in their functionalities and target audiences. SaaS delivers software applications to users via the internet, allowing for easy access without local installation. Examples include Google Workspace and Salesforce, which provide specific business functionalities. In contrast, PaaS offers a platform allowing developers to build, deploy, and manage applications without handling the underlying infrastructure. PaaS solutions, like Google App Engine, provide tools and services for application development, catering primarily to software developers rather than end-users.