With the increased popularity of cloud computing and services, businesses across the globe are moving away from the traditional on-premise services that they have come to rely on.
Cloud-based services have transformed how businesses have worked, allowing them to use IT infrastructures, platforms, software and applications via the Internet and online hotspots.
For organizations who are considering moving their ecommerce business to the cloud, there are three important terms to be aware of:
- Infrastructure as a Service (IaaS).
- Platform as a Service (PaaS).
- Software as a Service (SaaS).
IaaS, PaaS and SaaS are the three main types of cloud computing available today.
These platforms have grown significantly over the last decade, with its worldwide revenue increasing from around $90 billion in 2016 to more than $312 billion in 2020.
With growth like this, cloud computing is quickly becoming the norm as businesses begin to phase out on-premise software altogether.
The Key Differences Between On-Premise, SaaS, PaaS, IaaS
Not so long ago, most of a company’s IT systems were on-premises and clouds were just white fluffy things in the sky. Now, everyone can utilize cloud-based platforms for nearly all your systems and processes.
SaaS, PaaS and IaaS present three modern but different ways to describe how you can use the cloud for your business.
It is important to remember that most businesses using cloud-based platforms use a combination of SaaS and IaaS cloud computing service models, and many engage developers to create applications using PaaS, too.
SaaS platforms involve software that is available via third-party over the Internet.
Examples of popular SaaS providers include:
- Google Workspace, Salesforce.
PaaS focuses primarily on hardware and software tools available over the internet.
Examples of popular PaaS providers include:
- AWS Elastic Beanstalk.
- Windows Azure (mainly used as PaaS).
- Google App Engine.
- Apache Stratos.
- Adobe Magento Commerce Cloud.
IaaS works primarily with cloud-based and pay-as-you-go services such as storage, networking and virtualization.
Examples of popular IaaS providers include:
- AWS EC2.
- Google Compute Engine (GCE).
- Digital Ocean.
- Microsoft Azure.
- Magento 1 Enterprise Edition*.
The 3 Types of Cloud Computing Service Models Explained
1. IaaS (Infrastructure as a Service).
IaaS, also known as cloud infrastructure services, provides end users with cloud-based alternatives to on-premise, physical infrastructure, allowing businesses to purchase resources on-demand instead of the more costly venture of having to buy and manage hardware.
IaaS is scalable and offers businesses greater flexibility than on-premise solutions through the cloud. IaaS businesses typically provide services such as pay-as-you-go storage, networking and virtualization.
IaaS cloud servers are typically offered to businesses over the internet, whether through a dashboard or an API, ensuring users have complete control over their computing infrastructure.
IaaS platforms are:
- Highly flexible and highly scalable.
- Accessible by multiple users.
Maintaining on-premise IT infrastructure can be costly and labor-intensive as it often requires a significant initial investment in physical hardware. You will also probably need to engage skilled external IT contractors to maintain the hardware and keep everything working and up-to-date.
With IaaS, you can buy what you need, as you need it, and purchase more as your business grows.
IaaS solutions are highly flexible and scalable and can be replaced whenever needed without losing money on your initial investment.
Another advantage of IaaS is it puts control over the infrastructure back in your hands. You will no longer need to place trust in an external IT contractor — you can access and oversee IaaS products yourself if you wish, without being an IT wiz.
There are certain limitations and concerns when it comes to transitioning to IaaS, including:
- Legacy systems: Before a full migration to the cloud is completed, any legacy technology or applications should be reviewed for compatibility. There are many older systems that are not designed for cloud-based services and may need to be upgraded or replaced.
- Security: With the move from on-premise to the cloud, there could be new security threats, whether sources from the host or other virtual machines (VMs). It is critical that organizations review and research up-to-date security threats and their remediation strategies.
- Internal Training: With a new system comes a lack of familiarity with its intricacies. Businesses should prepare additional training and resources to ensure their users know what they are doing.
When to use IaaS.
IaaS is beneficial to businesses of all shapes and sizes. It allows complete control over your infrastructure and operates on a pay-as-you-use model, which fits into most budgets.
With most IaaS platforms, you get access to ongoing support and have the option of scaling up your requirements at any time.
Utilizing IaaS is an excellent way to future-proof your business.
IaaS non-ecommerce example.
A good example of IaaS is AWS EC2.
EC2 delivers scalable infrastructure for companies that want to host cloud-based applications. EC2 users do not own the physical servers — AWS provides virtual servers.
Users only pay for the usage of the servers, saving them the cost — and associated ongoing maintenance — of investing in physical hardware.
IaaS ecommerce example.
Adobe Commerce (Magento) can be used either on-premise or IaaS, depending on how the merchant chooses to host their store.
In the case of IaaS, the merchant is paying Magento for the licensing of the software and then using a third-party vendor for the best web hosting such as Rackspace.
Merchants are able to pay for a hosting plan that meets their own needs without the cost of maintaining their own physical servers. The merchant is still responsible for installing and managing updates to their Magento software.
2. PaaS (Platform as a Service).
PaaS, also known as cloud platform services, provides developers with a framework, software and tools needed to build apps and software — all accessible through the internet.
Often seen as a scaled-down version of IaaS, PaaS gives its customers broader access to servers, storage and networking, all managed by a third-party provider.
PaaS delivery is comparable to SaaS methods, with the main difference being that customers are not able to access online software but an online platform.
PaaS provides that platform for software developers to create, allowing them to concentrate on the software itself instead of any external issues.
PaaS platforms are:
- Accessible by multiple users.
- Scalable — customers can choose from various tiers of computing resources to suit the size of their business.
- Built on virtualization technology.
- Easy to run without extensive system administration knowledge.
PaaS is primarily used by developers who are building software or applications.
A PaaS solution provides the platform for developers to create unique, customizable software meaning that developers don’t need to start from scratch when developing applications — saving them time and money on writing extensive code.
PaaS is a popular choice for businesses who want to create unique applications without spending a fortune or taking on all the responsibility. It’s similar to the difference between hiring a venue to put on a show vs. building one yourself to put on a show.
The venue stays the same, but what you create in that space is unique.
Like IaaS, there are certain drawbacks to using PaaS that companies should be aware of, including:
- Integrations: With PaaS, you may encounter challenges when integrating new applications. This is tied into issues related to legacy systems since there are often aspects of these systems that aren’t built for the cloud.
- Data security: Using third-party servers for your data could potentially lead to additional security risks. Security options may also be limited since you will have to find a solution that can integrate with the third-party systems.
- Runtime: PaaS solutions may not be fully optimized for the language and frameworks your business uses and finding a specifically tailored solution may be difficult.
- Operational limitations: Customized cloud operations may not be compatible with PaaS solutions, especially those with management automation workflows. This can inhibit your operational capabilities and limit the full scope of your business.
When to use PaaS.
PaaS is often the most cost-effective and time-effective way for a developer to create a unique application.
PaaS allows the developer to focus on the creative side of app development as opposed to the menial tasks such as managing software updates or security patches. Instead, their time and brainpower can go into creating, testing and deploying the app.
PaaS non-ecommerce example.
A good example of PaaS is AWS Elastic Beanstalk.
Amazon Web Services (AWS) offers over 200 cloud computing services such as EC2, RDS, and S3. Most of these services can be used as IaaS, and most companies who use AWS will pick and choose the services they need.
However, managing multiple services can quickly become difficult and time-consuming for users.
That’s where AWS Elastic Beanstalk comes in. It works as another layer on top of the infrastructure services and automatically handles the details of capacity provisioning, load balancing, scalability, and application health monitoring.
PaaS ecommerce example.
Adobe Commerce (Magento) is the most common example of PaaS for ecommerce. It enables the merchant to bundle their hosting as part of their package with Magento.
Merchants evaluating Magento go through a scoping process to determine their hosting needs, bundled into their monthly plan. You will have full access to edit the source code of their Magento store and can fully customize the application.
Any platform updates, security patches and general maintenance to their store would be the merchant's responsibility.
3. SaaS (Software as a Service).
SaaS, also known as cloud application services, is the most commonly used service within the cloud market. SaaS platforms make software available to users over the internet, usually for a monthly subscription fee.
They are typically ready-to-use and run from a users’ web browser, which allows businesses to skip any additional downloads or application installations.
SaaS is delivered through the internet as a full functional service, accessible via any web browser. With SaaS, vendors manage the data, servers and storage, ultimately eliminating the need for IT review and streamlining business processes.
SaaS platforms are:
- Available over the Internet.
- Hosted on a remote server by a third-party provider.
- Ideal for small businesses or startups who cannot develop their own software applications.
- Scalable, with different tiers for small, medium and enterprise-level businesses.
- Inclusive, offering security, compliance and maintenance as part of the cost.
With SaaS, you don’t need to install and run software applications on your computer. Everything is available over the internet when you log in to your account online. You can usually access the software from any device, anytime — as long as there is an internet connection.
The same goes for anyone else using the software. All your staff will have personalized logins suitable to their access level. You no longer need to engage an IT specialist to download the software onto multiple computers throughout your office or worry about keeping up-to-date software on every computer. It’s all taken care of in the Cloud.
Another key advantage is the payment structure.
Most SaaS providers operate a subscription model with a fixed, inclusive monthly account fee. You know precisely how much the software will cost and can budget accordingly without worrying about hidden surprises.
Subscriptions can potentially include maintenance, compliance and security services.SaaS providers also offer out-of-the-box, simple solutions to set up if you need a basic package, with more complex solutions for larger organizations. You could have the basic software up and running within a matter of hours – and you’ll have access to customer service and support along the way.
Like IaaS and PaaS, there are limitations and concerns about SaaS, including:
- Data Security: With data primarily located in off-premise servers, security could potentially become an issue. Ensure that you have the right security solutions in place and are comfortable with whichever SaaS service you are using.
- Interoperability: Integrations with existing applications and services can be a concern since many SaaS apps are not designed for open integrations. Finding a service with integration capabilities can be difficult, and attempting to create your own can be worse.
- Customization: SaaS services typically allow minimal customization for features, capabilities and integrations. This can force companies to invest significant resources into managing or adding customization capabilities.
- Lack of control: With a SaaS solution, businesses often have to hand over ultimate control to the third-party service providers — giving them the keys to functionality, performance and even data. You will want to ensure that you trust the provider used or have the ability to review your information remotely.
When to use SaaS.
SaaS platforms are ideal for when you want an application to run smoothly and reliably with minimal input from you.
Take your email server, for example.
You want to know that you can continue to send and receive emails without needing to fiddle with your email settings or worry about updates. Imagine if your email server went under because you forgot to update it? That’s simply not an option in today’s marketplace.
If you use SaaS applications to run your email inbox, the chances of something going wrong are very small, and if something did go wrong, it would be up to the SaaS provider to find a solution.
You’re not only paying for the SaaS applications/products — you’re paying for peace of mind.
SaaS non-ecommerce example.
Google Workspace —formerly known as Google G Suite — is one of the most popular SaaS-based infrastructure services. The upgrade from G Suite came as a result of a more integrated experience across Google’s broader suite, which allowed its customers to better connect with their various tools.
The Google Workspace suite features applications people are aware of, such as Gmail, Google Calendar, Google Docs and more.
SaaS ecommerce example.
An excellent example of a SaaS ecommerce platform is BigCommerce.
BigCommerce is one of the leading SaaS ecommerce platforms for mid-market and enterprise brands. It has all the benefits associated with multi-tenant SaaS — ease of use, high-performance, and continuous updates — coupled with platform-wide APIs that enable businesses to customize their sites and integrate with external applications and services.
BigCommerce provides complete shopping cart software and hosting infrastructure to the user, allowing businesses to create an online shop within minutes without worrying about coding, hosting or software.
The BigCommerce platform also has regular updates that automatically roll out for users, and software licenses, upgrades, and hosting costs are all covered in the monthly subscription fee.
The Final Word
Ultimately, what are the differences between IaaS, PaaS, and SaaS?
- IaaS is there to provide you with maximum flexibility when it comes to hosting custom-built apps, as well as providing a general data center for data storage.
- PaaS is most often built on top of an IaaS platform to reduce the need for system administration. It allows you to focus on app development instead of infrastructure management.
- SaaS offers ready-to-use, out-of-the-box solutions that meet a particular business need (such as a website or email). Most modern SaaS platforms are built on IaaS or PaaS platforms.
The increasing popularity of IaaS, PaaS, and SaaS has reduced the need for on-premise hosting. As businesses and technology continue to merge, migrating to the cloud becomes paramount for organizations looking to remain on the cutting edge.
These cloud delivery models give users choices, flexibility and options that on-premise hosting simply cannot provide.
FAQs About SaaS vs PaaS vs IaaS
What is the best option, SaaS or PaaS or IaaS?
The answer is dependent on your business. Each cloud service model offers different features and functionalities.
If you want out-of-the-box features, without the hassle of installations, then SaaS may be the best option for you.
If you need a platform designed for building software products, then PaaS would help your business immediately.
If you are looking for a highly flexible, scalable service —while maintaining control of its infrastructure—then IaaS is the right choice for you.
What differentiates PaaS from SaaS?
The most significant difference between PaaS and SaaS is that SaaS products are fully managed by another company, from the servers to the data itself. With PaaS, you are able to use the cloud-based platform as a foundation for building software.
If you want to create your own applications for your business, then PaaS platforms are the best option.
What is the difference between IaaS and PaaS?
The greatest difference between IaaS and PaaS comes from who controls the system.
With IaaS, administrators gain more direct control over operating systems. On the other hand, users gain greater flexibility and control over proprietary applications or programs with PaaS.
How does the SaaS model differ from the IaaS model?
With both IaaS and SaaS, the cloud service providers manage servers, networking, virtualization and storage.
However, unlike SaaS, those who use IaaS are still responsible for managing some aspects of their business, including applications, runtime, middleware and data. SaaS is the more out-of-the-box option, while IaaS maintains a small level of control.
How do you identify IaaS PaaS SaaS? ›
IaaS builds the infrastructure of cloud-based technology. PaaS helps developers build custom apps via an API that can be delivered over the cloud. And, SaaS is cloud-based software companies can sell and use.What are basic differences between IaaS PaaS and SaaS? ›
IaaS is an acronym for Infrastructure As A Service. PaaS is an acronym for Platform As A Service. SaaS is an acronym for Software As A Service. The IaaS service provides its users with access to various resources like virtual storage and virtual machines.What is an example of a PaaS? ›
Popular examples of PaaS include: AWS Elastic Beanstalk. Windows Azure. Heroku.Is Netflix a PaaS or SaaS? ›
Yes, Netflix is a SaaS organization that provides on-demand videos using the software.What are examples of IaaS? ›
Examples of IaaS include Rackspace, Amazon Web Services (AWS) Elastic Compute Cloud (EC2), Microsoft Azure, Google Compute Engine (GCE) and Joyent.What is an SaaS example? ›
SaaS uses the Internet to deliver subscription software services, which are managed by a third-party vendor. Well-known SaaS examples include Dropbox, Google Workspace, and Salesforce. Infrastructure-as-a-service (IaaS) offers access to resources such as servers, storage, memory, and other services.Is Amazon a SaaS or PaaS? ›
AWS (Amazon Web Services) is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and packaged-software-as-a-service (SaaS) offerings.Is Gmail a SaaS or PaaS? ›
SaaS allows people to use cloud-based web applications. In fact, email services such as Gmail and Hotmail are examples of cloud-based SaaS services.Is Skype is an example of SaaS? ›
Is Skype SaaS? Yes! Skype for Business Server is cloud-based communication and collaboration solution, that offers the best communication and collaboration capabilities in the industry as part of Software as a Service (SaaS).What is difference between IaaS and PaaS and SaaS in Azure? ›
PaaS is most often built on top of an IaaS platform to reduce the need for system administration. It allows you to focus on app development instead of infrastructure management. SaaS offers ready-to-use, out-of-the-box solutions that meet a particular business need (such as a website or email).
What is SaaS PaaS IaaS in simple terms? ›
These services fall into three categories: IaaS (Infrastructure-as-a-Service), PaaS (Platform-as-a-Service) and SaaS (Software-as-a-Service). Each term refers to a resource made available to users as an on-demand model. This means users do not need to invest heavily in infrastructure to host and use their services.Is Gmail example of PaaS? ›
Gmail is one famous example of an SaaS mail provider. PaaS: Platform as a Service The most complex of the three, cloud platform services or “Platform as a Service” (PaaS) deliver computational resources through a platform.Is Facebook a PaaS or SaaS? ›
Facebook is an example of PaaS. Developers can create specific applications for the Facebook platform using proprietary APIs and make that application available to any Facebook user.Is Amazon S3 an example of PaaS? ›
Data Platform as a Service (PaaS)—cloud-based offerings like Amazon S3 and Redshift or EMR provide a complete data stack, except for ETL and BI.Is Zoom SaaS or PaaS? ›
It provides SaaS products for video conferencing, web conferencing, communications in real-time.Is Spotify a PaaS? ›
Software as a Service (SaaS)
Netflix, Spotify, Dropbox and Slack are common SaaS products, in which the product is then delivered to users over the internet on a subscription basis, giving users the flexibility to not have to worry about upfront installation purchases or ongoing maintenance costs.
Google App Engine, which is a platform as a service (PaaS) offering that gives software developers access to Google's scalable hosting.Is Microsoft Azure IaaS or PaaS? ›
In short, Microsoft Azure PaaS is a deployment and development environment that delivers simple cloud-based apps to complex, cloud-enabled applications. Harnessing the power of Azure PaaS allows you to maximize productivity and security for your workforce.Are virtual machines IaaS or PaaS? ›
VM's are IAAS (Infrastructure as a service) because on a VM you can manage what operation system runs and what software is installed.What are examples of IaaS in Azure? ›
- Lift-and-shift migration.
- Test and development.
- Storage, backup, and recovery.
- Web apps.
- High-performance computing.
Is Facebook an example of SaaS? ›
Also, it is a digital platform for communication not a publisher or media platform. Hence, Facebook is not an example of SaaS.Is Google an example of SaaS? ›
From a network that spans the globe to innovative solutions that transform organizations, Google Cloud has SaaS built into our DNA.Is Spotify an example of SaaS? ›
What it really means is business software that businesses pay for. SaaS companies can learn a lot from Spotify, from e-commerce subscription services, etc. There are similarities. But they aren't “SaaS”.Is Tesla a SaaS? ›
Tesla Third Row - Ross: Tesla becoming a Software as a Service (SAAS) Company. Tesla's tech opportunities seem endless. CEO Ross Gerber joins the podcast Third Row Tesla to discuss the reality of the car manufacturer becoming a Software as a Service (SAAS) Company.Is Verizon a PaaS? ›
A combination of Pivotal/Cloud Foundry and Verizon Cloud is a compelling blend of the leading edge PaaS platform with a next generation cloud infrastructure giving customers more flexibility, more performance options and a wider geographical coverage than other offerings.Is Apple cloud SaaS or PaaS? ›
Services that you consume completely from the web like Netflix, MOG, Google Apps, Box.net, Dropbox and Apple's new iCloud fall into this category.
If you've used a web-based email service such as Outlook, Hotmail, or Yahoo! Mail, then you've already used a form of SaaS. With these services, you log into your account over the Internet, often from a web browser.Is SQL Server PaaS or SaaS? ›
Azure SQL Database is a relational database-as-a-service (DBaaS) hosted in the Azure cloud that falls into the industry categories of Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS). SQL database is built on standardized hardware and software that is owned, hosted, and maintained by Microsoft.Is Twitter a PaaS or SaaS? ›
Of course Facebook, Twitter, etc. are software-as-a-service, provided over the internet. But the definition / line for “SaaS” is applications whose business model is primarily a subscription fee for software. Similarly, ecommerce companies are generally not “SaaS”.Is Zoom an example of SaaS? ›
As a SaaS company, Zoom allows individuals and companies the chance to communicate virtually through a unified communications platform. The platform offers three primary communication tools, namely, chat, audio calls, and video calls.
Is Uber app a SaaS? ›
SaaS: Software as a Service
As these applications are accessed through the internet, they often need no implementation by the end user. Well-known examples of SaaS applications are Uber, Netflix, Salesforce, Dropbox and Microsoft Office 365.
Sure, TikTok works for B2C SaaS. But what about B2B? I've been on TikTok for several months now (spending a 20-30 minutes each week which is enough to "feel" where the platform is going). It all got started with B2C content (teens/students doing fun/interesting stuff).Is Microsoft 365 PaaS or SaaS? ›
PaaS is the Platform as a Service. However Windows 365 is SaaS software as a service because you have a installed version of Windows on the cloud.Is Salesforce a PaaS or SaaS? ›
Salesforce is the leading SaaS provider with its flagship CRM platform, available exclusively online, as well as its SaaS platforms for marketing, service, and the Internet of Things.Is Microsoft Azure an example of SaaS? ›
Providers, such as Microsoft Azure SaaS, help organizations to get started with an application at a nominal upfront cost. Azure SaaS, as per the service agreement, manages the software and hardware, ensuring application availability and security of business-critical data.How do you explain PaaS? ›
Platform as a service (PaaS) is a cloud computing model where a third-party provider delivers hardware and software tools to users over the internet. Usually, these tools are needed for application development.Is Microsoft teams a SaaS? ›
With a transactable Software-as-a-Service (SaaS) offer, you can monetize your Teams app by selling subscription plans directly from your Teams store listing. For example, say you have a free app anyone can get in the store. Now you can offer premium and enterprise plans for users who want more features.What are PaaS types explain? ›
Platform as a Service (PaaS), and the various types of PaaS, constitute one of the three main cloud computing models—the other two being Infrastructure as a Service (IaaS) and Software as a Service (SaaS).How do you identify SaaS? ›
- 1) Is your software built from the foundation to be single instance multi-tenant? ...
- 2) Do you support configuration or customization? ...
- 3) How are upgrades managed? ...
- 4) Are integrations supported through upgrades? ...
- 5) Does your application run on the cloud?
AWS (Amazon Web Services) is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and packaged-software-as-a-service (SaaS) offerings.
Is Microsoft a PaaS or IaaS? ›
In short, Microsoft Azure PaaS is a deployment and development environment that delivers simple cloud-based apps to complex, cloud-enabled applications. Harnessing the power of Azure PaaS allows you to maximize productivity and security for your workforce.Is Gmail an example of SaaS? ›
A simple example of SaaS is an online email service, like Gmail. If you use Gmail, you are not hosting your own email server. Google is hosting it, and you are simply accessing it through your browser-as-client.Is Facebook a PaaS? ›
Facebook is an example of PaaS. Developers can create specific applications for the Facebook platform using proprietary APIs and make that application available to any Facebook user. Some applications integrate a user's Twitter and Facebook account, others integrate a database with a Facebook profile.Is Google's Gmail a PaaS or IaaS? ›
SAAS (Software As A Service) :
Applications like email (Gmail, Yahoo mail etc), Social Networking sites (Facebook etc)
PaaS (Platform as a Service). PaaS, also known as cloud platform services, provides developers with a framework, software and tools needed to build apps and software — all accessible through the internet.Is Zoom a PaaS or SaaS? ›
It provides SaaS products for video conferencing, web conferencing, communications in real-time.Is email a PaaS or SaaS? ›
SaaS allows people to use cloud-based web applications. In fact, email services such as Gmail and Hotmail are examples of cloud-based SaaS services.