SaaS vs PaaS vs IaaS: Comparison for Business

The great transmigration of businesses to the cloud gathers pace. By 2020, companies will host over 67% of their workloads on remote servers and use one of the popular models of online services. IaaS vs PaaS vs SaaS — which of the three options fits your business needs best? This article will guide you to the right answer.

Cloud computing has changed the way we store, manage, and consume digital products.

People no longer want to bother with downloading and installing apps. Why should they if cloud-based software is available from different devices — office computers, home desktop or smartphones — while you are sitting in a coffee shop?

Organizations no longer wish to spend time and money on building and maintaining IT infrastructure. They would rather pay a cloud service provider for what they need and start using technology instead of managing it.

cloud computing

Cloud computing delivers obvious benefits including cost effectiveness, great scalability, convenience, and, at the core, competitive performance. No vendor or service provider aiming at expanding their business can ignore such opportunities. The latest stats only prove this. Here are some results of surveys conducted by Gartner:

  • Over a third of companies name cloud investments among their top three business priorities.
  • The cloud services market is expected to rise by 17.5% in 2019 and hit $214.3 billion (up from $182.4 billion in 2018).
  • By 2022, 28% of expenditure within enterprise IT markets will shift to cloud with the revenue of the cloud services industry amounting to $331.2 billion.
  • Infrastructure as a service (IaaS) is forecast to be the fastest growing segment with 27.5% growth in 2019, followed by platform as a service (PaaS)  with 21.8% growth.

Comparison of IaaS vs PaaS vs SaaS revenue growth (billions of US dollars, forecast by Gartner)

  2018 2019 2020 2021 2022
Infrastructure as a service (IaaS) 30.5 38.9 49.1 61.9 76.6
Platform as a service (PaaS) 15.6 19.0 23.0 27.5 31.8
Software as a service (SaaS) 80.0 94.8 110.5 126.7 143.7

Three major models of cloud service: which should you prefer?

The National Institute of Standards and Technology (NIST) asserts that all ‘as a service’ solutions have the following common features:

  • self-service
  • scalability
  • elasticity
  • programmatic access
  • availability over the Internet
  • pay-as-you-go model

Besides, each of the three cloud options mentioned above has its unique advantages and offers its own way to boost your business. Below, we’ll give an in-depth examination of IaaS vs SaaS vs PaaS differences to help you make a well informed choice.

What is IaaS?

Infrastructure as a service means that a vendor provides clients with servers, data storage, network components, data center space, operating systems, and other compute resources in the cloud. Instead of buying on-premises hardware, organizations pay for using elements of infrastructure on demand. You can scale up and down, depending on how much storage and computing power you need at any particular time.

Companies have access to their cloud servers via a dashboard or API and can control the entire infrastructure themselves. An IaaS provider administrates servers, networking, hard drives, storage, and virtualization, while clients manage applications, operating systems, middleware, and data.

infrastruxture as a service IaaS

IaaS advantages

IaaS approach fits businesses that have no intention, reason or possibility of investing much in hardware. This cloud solution is especially advantageous when your situation is temporary or can change unexpectedly — for example, if you develop a new application and don’t yet know yet how many resources your product will require in the near future.

Overall, when choosing an IaaS model, organizations benefit from:

  • cost cutting as they don’t need to buy hardware and manage in-house data centers.
  • virtualization of administrating tasks.
  • entire control over the infrastructure.
  • ability to quickly scale up or down a software product.
  • expenses that depend on consumption — typically, IaaS clients pay for the amount of virtual machine space they rent on an hourly, weekly or monthly basis.
  • maximum flexibility — when comparing IaaS vs SaaS vs PaaS.
Possible issues

While outsourcing many complex tasks to an IaaS vendor, your team still needs system administrators to install software packages, maintain the systems, and apply security practices.

  1. Sometimes clients find the costs of IaaS higher than expected. To avoid this problem, you should thoroughly monitor your IaaS bills to understand how exactly you use the cloud and prevent expenditures on unauthorized services.
  2. The infrastructure configuration may lack transparency, making management and monitoring more difficult.
  3. Downtime periods, network bottlenecks, and other problems experienced by a vendor will negatively affect your workloads.  

What is PaaS?

In addition to the underlying infrastructure, platform as a service vendors render companies an environment to develop, test, and manage software as well as deliver it to end users via the Internet. IaaS provides operating systems, prebuilt tools, middleware and other runtime components for creating and launching new software products.

Having all the facilities at hand, engineers can focus on designing apps online, with no concern about updates, data storage or system management.

developer platform as a service paas

PaaS advantages

No matter the size, your organization can thrive on capabilities provided by PaaS. It enables multiple developers located in different parts of the world to work on the same project. There are many benefits of this model, including:

  • cost-effective app development and deployment process.
  • ability to concentrate on designing apps while a provider manages. security, backups, operating systems, and server software.
  • facilities for collaborative work and effective cooperation with remote teams.
  • fewer lines of code.
  • improved time to market.
Possible issues
  1. Your control is limited to the app being built on top of the platform. If the hardware or operating systems break down, your software (and business) will suffer, as well.
  2. With PaaS, multiple users have access to the same resources, which poses additional security risks.
  3. A software environment rendered by PaaS providers impels developers to use specific tools, databases, interfaces or languages. You should carefully examine a vendor’s offering to make sure that it meets your requirements.

What is SaaS?

Software as a service is the most widely known option of all cloud computing offerings. You simply subscribe to cloud-based apps and run them on the web browser rather than downloading the required software to install it on your office computers. This model is extremely convenient for distributed teams localized in different parts of the world.

girl with computer saas

SaaS advantages

SaaS providers manage the entire IT infrastructure (hardware, middleware, servers, storage, databases), and ensure security and timely software updates.  In this way, companies spend fewer of their resources on technical support. Instead, they can shift all their focus to more pressing business challenges.

While IaaS needs tech expertise to deal with and PaaS means a platform for developers,  anyone, from an office worker to large enterprise, can be an end user of SaaS.

To sum up, the SaaS model is so popular due to:

  • ease of setup and deployment — to start using a cloud-based app, you need just to go online and log in.
  • low costs.
  • easy upgrades.
Possible issues
  1. You can configure the settings but have no control over the runtime your app is executed in. When a software vendor faces technical issues, so does your piece of software.
  2. Users face security concerns typical to cloud-based software.

It’s all about control

Several years ago, Albert Barron, an executive software client architect at IBM, offered an interesting explanation of major ‘as a service’ models by comparing them with the product lifecycle of pizza.

SaaS vs PaaS vs IaaS explained with a pizza analogy

pizza as a service cloud computing explanation

Image source: IBM Community

Though this analogy has vivid flaws (for example, with Software as a Service, a vendor doesn’t actually manage everything as you can still configure the app settings), it perfectly illustrates the major difference between SaaS and PaaS vs IaaS. It boils down to the amount of control you have over your IT environment.

The traditional on-premises model makes you the boss of everything associated with computing. In the IaaS scenario, your company is still responsible for almost everything except for hardware and virtualization. On the other hand, when using the SaaS option, you delegate almost all powers and authority to a third party. Finally, PaaS is something in-between. You still control apps and configurations while the vendor manages the rest.

All things considered, it becomes obvious that SaaS is the best choice for customers seeking ready-to-use business solutions. PaaS is the domain of software development companies building custom apps, and IaaS allows you to rent infrastructure and scale existing or new applications for larger audiences while retaining the maximum level of customization and control.

IaaS vs PaaS vs SaaS difference: the summary


  IaaS PaaS SaaS
Provided resources
  • Virtual machines
  • Servers
  • Data storage
  • Load balancers
  • Network components
  • Execution runtime
  • Databases
  • Web Servers
  • Development tools
  • CRM
  • Virtual desktop
  • Email
  • Cloud-based storage
  • Productivity tools
Client’s sphere of control
  • App configuration
  • Application
  • Server configuration
  • Operating system
  • Security
  • Network
  • App configuration
  • Application
  • Server configuration
  • App configuration
People who deal with the model directly
  • IT administrators
  • Developers
  • QA
  • Operational staff
  • Regular customers
  • Business people
Examples of IaaS vs SaaS vs PaaS
  • Amazon Web Services (AWS)
  • Microsoft Azure
  • Google Compute Engine
  • IBM SmartCloud Enterprise
  • AWS Elastic Beanstalk
  • Windows Azure
  • Google App Engine
  • Heroku
  • Oracle Cloud Platform
  • Gmail
  • MailChimp
  • Dropbox
  • JIRA
Will be the best choice if you aim to…
  • rent some computing resources
  • retain full control over your IT systems
  • build a customized app
  • engage remote developers who will work on the same project
  • use an out-of-the-box software solution to grow your business
  • test your business idea

Go cloud and attain sky-high success

Cloud computing unlocks exciting business opportunities such as accessibility of resources from anywhere in the world, scalability, better time to market, and reduced costs.

The technology keeps on evolving and generating multiple other ‘as a service’ offerings - API as a service (AaaS), Container as a service (CaaS), Function as a service (FaaS), and even Blockchain as a service (BaaS), to name just a few. All of them are meant to make your life easier and less troublesome. However, before starting your cloud journey, we strongly recommend that you consult our experts to find and realize the best possible solution for your business.

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