SaaS, PaaS, and IaaS: Understand the differences

Understanding the cloud is critical to the future of business. Here's a brief explanation of the three layers by which cloud services are delivered.
Written by Conner Forrest, Contributor
Image: iStockphoto/Marjan_Apostolovic

Cloud computing is one technology moving faster than almost all others toward becoming table stakes in enterprise IT. In 2017 alone, the public cloud services market is predicted to grow 18 percent, hitting a value of $246.8 billion, according to research firm Gartner.

Understanding the cloud can help business leaders make more strategic investments and remain competitive going forward. Cloud clarity starts with understanding the model itself.

SEE: Cloud computing policy template (Tech Pro Research)

As a service

According to 451 Research analyst Carl Brooks, for a technology solution to qualify as "as a Service," it has to meet the National Institute of Standards and Technology (NIST) definition parameters, which he paraphrased as "self-service, paid on-demand, elastic, scalable, programmatically accessible (APIs), and available over the network."

In a general sense, the cloud is divided into three distinct layers: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). The fundamental model of cloud computing that underpins all three of these layers is a service rental model, according to Forrester Research principal analyst Dave Bartoletti. "You are renting infrastructure, or you are renting development platforms and tools, or you are renting software. That's IaaS, PaaS, and SaaS," Bartoletti said.

Here's a brief explanation of each layer, and how they impact the business.


SaaS is the often the top-most layer in an organization's cloud strategy. It refers to software that is hosted on someone's else's infrastructure, but delivered to a client organization's end users as a service, often accessed through a specific web portal.

"SaaS is packaged software that you connect to, that looks the same for every single customer. You don't get to control updates, or when upgrades happen," Forrester Research principal analyst Lauren Nelson said. "You get some level of customization, but the entire stack is taken care of by a third party."

Being that the management of the software is offloaded to a third party, it is also the most abstracted layer, Bartoletti said. This makes the software easier to consume, as installation and support are typically handled by the vendor.

Common SaaS users are business people, including salespeople using a SaaS-based CRM, Bartoletti said. Well-known SaaS products include Salesforce for CRM and Workday for ERP. SaaS could be a great fit for companies that consume a lot of commodity software, but might not be very useful for companies that build a lot of proprietary software in house, Bartoletti added.


PaaS is the next layer down the cloud stack, offering platforms upon which apps and services can be built. Very few, if any, business people will interact with a PaaS, Bartoletti said, as it is primarily geared toward developers and operations professionals.

"The benefit of using Platform as a Service to your business is that it lets you build new things faster," Bartoletti said. He also noted that it is a way to "add more tools in your toolbelt."

Simplifying even further, Brooks said that "PaaS is a place that you can stick code and it will run without you doing anything else."

Common examples of PaaS solutions are Cloud Foundry and Red Hat's OpenShift. While there are many general platforms available, there are also other PaaS offerings that are focused on databases, big data, and other niche areas, Bartoletti said.

Unlike with SaaS, companies that build a lot of proprietary software may look to PaaS first in their cloud deployment, as a way of changing their hosting and delivery strategy.


The bottom-most foundational layer of cloud computing is IaaS, which offers the storage, networking, and compute resources needed to run a business. Brooks described IaaS as "mail-order computers without the mail delay."

IaaS is what most people think of when they hear the term 'cloud computing'. It's also the layer at which conversation around public versus private cloud carries the most weight.

"For a business user, the benefit of IaaS is reduced infrastructure cost and more infrastructure flexibility," Bartoletti said. But it's important to note that lower cost is an ideal, but isn't always the case, as there are a lot of factors that come into that equation, Bartoletti added. Much like the other layers, most of the value in IaaS comes from the convenience of letting someone else worry about the infrastructure.

Blurred lines

The abovementioned layers offer a rough outline of what's available through the cloud. But these services are also growing increasingly complex, and it's beginning to change their makeup as well.

"As this complexity grows, people stick to these three categories much less frequently, and they start to blend," Nelson said. The lines between IaaS and PaaS, for example, have started to blur quite a bit, she added. Bartoletti also noted the idea of blended categories, offering the examples of Salesforce as both a SaaS and PaaS vendor, and Amazon Web Services (AWS) as both an IaaS and PaaS vendor.

In terms of where to start, the answer will be different for each organization. Brooks said that many people might assume they should start with IaaS and work their way up, but that isn't always the best scenario. For example, past a certain scale SaaS and PaaS might require their own specialized infrastructure to operate more effectively than if they were run on an IaaS solution, Brooks said.

It's also important to consider customizability. According to Bartoletti, SaaS is the least customizable layer, PaaS is more customizable, and IaaS is highly customizable. So, users should choose what to invest in based on their needs.

Organizations should also consider their corporate data policies, Nelson said. Vendors are only responsible for maintaining compliance with a policy through their layer, so it's important to make sure the policies that an organization adheres to will fit with each cloud vendor and layer that they invest in.

Businesses should research the cloud thoroughly, and vet vendors carefully before beginning their cloud deployment. Much like the legacy infrastructure before it, there's no cookie-cutter solution that will fit all needs, and firms should try to avoid the hype and match their cloud investments to the real needs of their company before proceeding.

"The future of computing in the enterprise, for the next five to 10 years, is really going to be focused around identifying the right mix of cloud services for your business," Bartoletti said. "And that's a complex thing to do -- the right mix of IaaS versus PaaS versus SaaS."

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