The difference is actually between a
product and a
service. A service is something that another party provides, and that may - actually, they most definitely will - at some point stop providing, for various reasons. You want to minimize your dependence on any services - especially ones that are not trivially replaceable or that don't come with contractual agreements to cover your costs in case of the service being shut down.
That's why I hate the whole SaaS idea - it turns products into services; something that should be permanent (as long as you can maintain the hardware it runs) into something that is ephemeral and ever changing. It's great for the service provider, but it totally sucks for the customers. SaaS drives entropy in the computing universe.