SaaS vs. PaaS vs. IaaS: The Ultimate Cloud Computing Guide

At the start of the ‘10s, “the cloud” was the phrase on everyone’s lips. It was a buzzword employed by many and understood by… not as many.

Now, it’s a natural part of business, touching tech at every level from IaaS (infrastructure) to PaaS (platform) to SaaS (software). In fact, it’s been reported that over 94% of all companies involve cloud solutions in their structure.

This overview explores the key differences in SaaS vs. PaaS vs. IaaS. It also considers some of the key trends and standards to stay aware of as a cloud provider.

SaaS vs. PaaS vs. IaaS: What are they?

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Let’s back it up for a bit. You’re probably at least familiar with the concept of cloud services, but you might need a refresher in SaaS, PaaS, IaaS, and the differences between them.

The “aaS” stands for “as a Service.” It refers to a delivery model where services are centrally hosted (“in the cloud”) and licensed on a subscription basis. 

If you don’t work in tech, you may be most familiar with SaaS (software as a service) products like Slack and Canva. You pay a subscription fee to use the software’s features and the SaaS company stores your work.

PaaS (platform as a service) offers platforms for developing and launching applications. Tools like Heroku and AWS’ Elastic Beanstalk fall into this category. PaaS also often includes analysis and testing tools, helping companies cover the entire life cycle of their software. You could even use PaaS to build your SaaS.

With IaaS (infrastructure as a service), you can apply a top-down cloud architecture to your whole business. IaaS services like DigitalOcean and Rackspace offer core tools like servers, IP networks, and security.

What’s the difference between SaaS, PaaS, and IaaS?

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When comparing SaaS vs. PaaS vs. IaaS, people will often use a nesting-doll illustration. Each one’s offerings fit inside the other, with SaaS being the most hands-off and IaaS the most hands-on.

Some of this can be misleading because it implies that Saas, PaaS, and IaaS are different tiers of the same package. If you’re looking for SaaS, you probably won’t get anything you need from a PaaS, or vice versa.

It might be better to think of SaaS vs. PaaS vs. IaaS in terms of which audience they target. While they all offer the benefits of cloud computing, they’re geared towards different segments of the tech world. Since IaaS includes structural elements, it most appeals to tech company owners and IT departments. PaaS tools are aimed at developers, while SaaS targets consumers and users.

To put it simply…

• IaaS: Infrastructure tools (security, networks, hardware, servers, etc.) aimed at business owners and larger-scale projects
• PaaS: Creative and technical tools (collaboration, design, testing, deployment, integration) aimed at developers
• SaaS: Cloud-based software tools (writing, design, marketing, business management, CRM, communication, etc.) aimed at consumers of all types

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Introduction to SaaS (Software as a Service)

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What sets SaaS apart from other types of software is its delivery model. Traditionally, software is downloaded from an online source (or, in some cases, a physical disc or drive). If it’s a paid product, you likely pay an upfront fee for the license, which can vary depending on what version you use and how many people are using it. Some softwares, like Adobe Creative Cloud, charge a recurring fee.

Rather than being bought or exchanged as a product, SaaS is delivered “as a service”—you access it online and pay for it as long as you use it. This removes the need for software and hardware management, offering users an easy and cost-effective alternative.

There are few limits to what a SaaS can do, but it’s always done by using the providers’ pre-built tools. With PaaS and IaaS, you’re given those tools to build it yourself.

For example, consider Canva. If you’re making invitations for your kid’s birthday party, you may use Canva’s free version for a quick, pretty design. If you’re in charge of a large company and you need to make high-quality branded content, you may make use of Canva’s Enterprise plan to build a brand kit.

You’re using different features, approaching them in different ways, and achieving different goals, but you’re still interacting with Canva the same way. You don’t own the software; you’re engaging with it as a user.

SaaS examples

• Google Docs
• Slack
• WordPress
• Salesforce
• Asana

Introduction to PaaS (Platform as a Service)

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If you’re confused about PaaS, it may be helpful to start by defining a “platform” in the context of computing. A platform is the digital environment in which a software is run. It can be an operating system (macOS, Windows, Android, etc.), a browser, an API, hardware, even a piece of software like Adobe Flash. The only thing it has to do is execute the code for a software.

PaaS allows developers to deploy and build software on a platform provided as a service. PaaS users own (or at least customize) the software they create. The provider owns the operating system, server, and manages runtime, networking, and scaling.

PaaS is also known for providing tools to code and develop applications. Since scaling and tweaking are often necessary for software upkeep, it makes more sense to let developers build and maintain their programs directly from their platform. Some even offer low-code tools for beginners to build their own apps.

Let’s return to the design example. Rather than creating a graphic design project, PaaS helps create and run a graphic design program. You could create a software like Canva (but not too much like Canva) using PaaS tools, or create it on your own and use a PaaS like Google App Engine to run it.

PaaS examples

• Google App Engine
• Heroku
• Salesforce Lightning
• GitHub
• Force.com
• Microsoft Azure

Introduction to IaaS (Infrastructure as a Service)

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While a “one within the other” model for describing SaaS vs. PaaS vs. IaaS is flawed, it does help illustrate what IaaS offers for users: foundation. IaaS provides storage, networking, and computing resources that can scale and bend to meet demand.

How can a server be delivered online? The process involves virtual machines, which emulate a computer system using software. IaaS providers use APIs to connect people’s requests to a large network of virtual machines. For users, that means they pay (usually on a per-use basis) for compute, storage, networking, and other resources, accessing them without the use of on-site servers.

Unlike SaaS and PaaS, IaaS lays the groundwork for software deployment, development, or use to be done on your own. You essentially own the entire process, and the only thing you’re paying for is the “space.” Let’s say you pour yourself a cup of tea. You can think of SaaS as the tea, PaaS as the kettle, and IaaS as the kitchen.

In the example of graphic design, IaaS would process your work. If you run a graphic design company, you may employ it so your software can handle a bigger load, or so your team can expand without extra IT work. You pay for structural resources that can be scaled or migrated as needed.

IaaS examples

• Rackspace
• DigitalOcean
• Amazon EC2
• IBM Cloud
• Linode
• Azure Virtual Machines

SaaS vs. PaaS vs. IaaS: Pros and cons of cloud computing

The cloud model has taken business by storm because of its convenience and cost-effectiveness. SaaS, PaaS, and IaaS allow companies to enter the marketplace and grow without prohibitive costs for on-premise IT.

Still, there are reasons to remain skeptical. Some commonly-cited cons of cloud computing include security and ownership. Putting your IT completely in another company’s hands makes some reasonably frightened.

Naturally, most cloud companies are dedicated to addressing this. Security and latency are two of their top concerns.

There are also alternatives to the public cloud model. Some providers offer private clouds that dedicate all their resources to a single client. Others support a hybrid model, wherein on-premise and cloud structures work together to power your business.

SaaS pros and cons

From a consumer perspective, cloud software tools are attractive for several reasons. SaaS is often less expensive than licensed software, and people love the convenience of editing, viewing, and saving their work from anywhere.

For businesses, that accessibility is even more important. Having a single dashboard for your company’s workflow, communication, marketing, etc. can be a vital resource.

SaaS also has benefits for providers. It’s a lucrative and ever-growing industry, and the subscription model ensures steady revenue. The infrastructure needs of SaaS can be demanding—any lapse in latency, scaling, or security sends customers packing.

Security remains a concern for SaaS users, both in terms of trust and potential for unavoidable data loss. Businesses employing SaaS face the issue of migrating their data and getting employees acquainted with new software.

PaaS pros and cons

PaaS offers the key advantage of reducing in-house resources, which can cut costs for companies and allow small teams to develop quality software. Reducing the in-house load also lets you roll out apps and updates on schedule without cutting corners.

For businesses, PaaS makes training easier for teams. Its multi-platform abilities are impressive for remote and on-the-go work, and they remove the headache required to update your tech.

PaaS offers similar benefits to SaaS for cloud providers. In fact, it’s the fastest-growing sector of cloud computing. Targeting developers has positives and negatives for providers. It’s easier to sell a service as vital in a more niche market, but developers are savvy enough to see through deceptive marketing.

Relative to Saas and IaaS, PaaS is less flexible. Scaling can be a concern for growing companies, as can compatibility with existing operations.

IaaS pros and cons

Like PaaS, IaaS carries the huge advantage of reducing operating costs. It gives startups and small teams a competitive edge while allowing businesses at any scale to build and maintain hands-free.

Most IaaS companies adopt usage-based pricing models, so customers only pay for the infrastructure they use. This can be a more complicated and less stable pricing strategy, but it ensures neither side is wasting their server capacity.

Migration is a challenge for any company looking to invest in cloud computing, but especially for IaaS. It poses security concerns when migrating your company’s data, and a particular need for compatibility with your company’s other operations.

There may be regulatory issues with migrating your company to IaaS, particularly if servers and networks are located overseas. This challenge applies equally to IaaS providers, who have to be especially mindful of security and latency concerns.

Summary

Pros

• Low cost
• Convenient
• Scalable
• Ideal for remote work
• Cross-platform
• Easy training
• Automatic updates
• Lucrative industry
• Steady revenue

Cons

• Security
• Ownership
• Compatibility with existing operations
• Regulatory issues (IaaS)
• Latency
• Competitive market, high expectations

Beyond SaaS vs. PaaS vs. IaaS: DBaaS, DaaS, and more

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While it’s common to treat the whole of cloud computing as SaaS vs. PaaS vs. IaaS, there are actually many other services offered under the cloud umbrella. While these services can arguably be grouped into the broad categories of “software,” “platform,” and “infrastructure,” it’s as reductive as putting the entire tech world into those boxes. Here are a few examples of other acronyms you may find.

DaaS (data/desktop/device as a service)

Let’s get the most confusing one out of the way. DaaS is used to refer to three different models: “desktop as a service,” “data as a service,” and “device as a service.”

“Desktop as a service” offers remote desktop sessions that let you access whatever you have on your desktop from anywhere.

“Data as a service” supplies companies with data they collected and organized on their own (for instance, IBM offers weather data as a service).

“Device as a service” can also be called “PC as a service” (PCaaS) or the broader umbrella “hardware as a service” (HaaS). It’s a subscription model for actual hardware, delivering PCs to your business for a set amount of time under contract.

DBaaS (database as a service)

If that wasn’t confusing enough, there’s also a distinction between data as a service and database as a service. Where DaaS delivers the data itself, DBaaS houses it, providing a database layer for app development.

(M)BaaS ([mobile] backend as a service)

At first blush, it might be hard to distinguish backend services from IaaS. Where IaaS provides core building blocks like servers and networks, BaaS/MBaaS offers an API and tools for different computer languages to integrate with your software.

These services often involve cloud storage and can also feature security, database management, hosting, and updating. Features vary from one provider to the next; for example, Google’s Firebase offers Google search indexing. These services are often geared towards mobile app development, so they’re sometimes collectively referred to as MBaaS.

SECaaS (security as a service)

While security is a crucial part of any cloud computing service, there are companies set up specifically to provide security solutions in a SECaaS model. More cost-effective than on-premise security solutions, SECaaS can include encryption, data loss prevention, recovery, monitoring, network security, and much more.

Other structural elements offered as a service include NaaS (network as a service) and iPaaS (integration platform as a service).

(M)CaaS ([managed] content as a service)

On the more technical side of things, CaaS/MCaaS provides customers with raw content on demand to be used by the customer’s systems. This isn’t to be confused with services like Penji, which connect customers to creative content (in our case, graphic design) through a subscription model. Rather, these services generate raw technical content like terminology, numerical values, and UNSPSC codes. This content is shared directly between systems and never needs to be looked at by a human.

XaaS (everything as a service)

You may see XaaS used as an umbrella term for all the above services. While we often associate the XaaS model with cloud computing, examples like hardware as a service show that the net is even wider. Some of the examples we didn’t touch on include:

• MaaS (marketing as a service/mobility as a service)
• STaaS (storage as a service)
• (D)RaaS ([disaster] recovery as a service)
• FaaS (function as a service)
• ITMaaS (IT management as a service)

XaaS is also used to refer to companies that provide the “total package” of cloud solutions. They may not offer everything listed here, but they have services that fall into SaaS, PaaS, and IaaS.

One prime example is Google Cloud. They allow customers to host their work on Google’s cloud infrastructure, build software on the Google App Engine platform, and take advantage of Google’s own software offerings like Google Docs, all through the XaaS model.

What’s Next? 5 IaaS, PaaS, and SaaS trends in 2023

Moving beyond the SaaS vs. PaaS vs. IaaS conversation, recent computing trends have shaken up the cloud service game. Whether you’re a provider or a consumer, you’ve got to keep track of the ever-changing state of tech to stay ahead. These are some of the most important IaaS/PaaS/SaaS trends to look out for in 2023.

1) AI

Who could’ve guessed?

As AI solutions continue to grow more complex, it only makes sense that they’re affecting every sector of the tech industry. For SaaS/PaaS/IaaS, it’s already used heavily for marketing, analytics, support services, security, and maintenance.

While it’s estimated that more money will be spent on AI than IaaS and PaaS combined within a few years, the two don’t have to be mutually exclusive. In terms of SaaS vs. PaaS vs. IaaS, you’re most likely to find AI tools used within SaaS, but they can have their advantages at any level.

For providers, AI offers a solution to age-old problems like security risks, latency, and updates. AI monitoring can be used to track and troubleshoot issues with little-to-no human input, ensuring satisfied customers and letting providers focus on features.

In the same vein as AI, machine learning is being adopted by more and more SaaS providers. It’s especially common to see this used for marketing and by CRM providers like Salesforce. It allows for advanced data analytics and predictive content for customers.

2) Vertical SaaS/PaaS/IaaS

“Vertical” services are angled toward specific industries, as opposed to “horizontal” services that aim for broad appeal. The vertical SaaS field has grown substantially in the past few years, as the pandemic sent companies in every industry searching for remote solutions.

Some of the most prominent leaders in vertical SaaS are Toast (restaurant management), Procore (construction), and Duck Creek (P&C insurance). As a SaaS provider, this trend offers the opportunity to wholly tap into a singular market, standing apart more than you could in the crowded general SaaS space.

Further driving this trend is the development of “micro SaaS” companies that apply not just to a specific industry, but a specific service. For example, Lempod is a SaaS that only offers engagement tools for LinkedIn. Too many specialized tools can be a headache for consumers, but fulfilling a specific need can make you indispensable for your clients.

While “vertical” is an adjective most often used to describe SaaS, it has potential for PaaS and IaaS as well. Industry-specific PaaS can be targeted towards specific types of apps or distribution channels, while IaaS can target the network needs of specific industries (e.g. gaming).

3) SaaS/PaaS/IaaS cross-migration

At some point in this guide, you may have thought to yourself, “Can I develop a SaaS app on a PaaS platform? Can I use IaaS servers for your PaaS?” While offloading responsibilities to other providers can be a slippery slope, it’s increasingly common for cloud services to lean on each other to stay ahead.

With all the growth and competition in the marketplace, many SaaS companies are turning to PaaS, both for growing their own services and providing additional services to consumers. 

One oft-cited example is Deliveroo, a UK-based food delivery company. At the onset of the pandemic, they found themselves facing a surge in demand that their systems couldn’t handle. They turned to AWS’ PaaS tools (among others) to manage their growth and reduce costs.

Accounting for this growing need, many SaaS/IaaS companies now also offer PaaS solutions. Cloud giants like Amazon and Google were among the first to ride this wave, but companies built on SaaS like Salesforce and Box have since hopped aboard.

Salesforce Platform represents another key trend in the PaaS space: the “low-code” platform. The method allows users to build apps with drag-and-drop interfaces, reducing the need for advanced coding knowledge.

4) Cross-platform tools

As the market expands and vertical/micro SaaS tools become more popular, consumers run the risk of data “scattering.” If you’ve got different programs for, say, CRM, payroll, security, outage reports, etc., you might not even know what data you have, let alone where it is.

Cloud service providers have come up with a handy solution: cross-platform data management tools. If, for instance, you have some documents stored in a public cloud and others stored on your own server, tools like GoodSync let you store, migrate, and organize data on any system.

A different sort of cross-platform tool is becoming increasingly popular in the PaaS space. App developers have struggled in the past to account for the different requirements of iOS, Android, and web app systems. Services like Flutter, React Native, and Xamarin help developers stay ahead of the curve with development tools that work for any tech.

Tools that consolidate systems are likely to continue being a lucrative market. They empower SaaS/PaaS/IaaS providers and users to expand their horizons without worrying about overextension.

5) Serverless

One new cloud offering that’s quickly gaining steam is “serverless” computing. This somewhat misleading title refers to a variety of services operating on a pay-as-you-go model based on functions rather than server space. Rather than paying for server use with traditional IaaS, serverless cloud computing lets you pay for compute and not have to worry about servers.

“Serverless” and “FaaS” (function as a service) are sometimes used as synonyms. Both usually refer to development tools like Amazon Lambda, which allow developers to run code and build backend on a per-resource basis.

The serverless cloud is just another way for developers to build software (yes, even SaaS) quickly and cost-effectively. Be on the lookout for other service models that trim fat and streamline processes.

Conclusion

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Reflecting on SaaS vs. PaaS vs. IaaS, it’s not a perfect framework for understanding XaaS. With new solutions being developed every day, it’s not always helpful to fit everything into “software,” “platform,” and “infrastructure” boxes.

Whether you dispense cloud services or make use of them, there’s no reason to feel limited by what you know. SaaS, PaaS, and IaaS have solutions for distinct problems, but they are industries with an ever-growing range of services for every type of user.