SaaS vs PaaS vs IaaS: Overview and Comparison

Aug 7, 2019 6:48:18 PM

SaaS VS PaaS VS IaaS

In 2019, the public cloud services market was expected to reach around 214.3 billion U.S. dollars in size and by 2022 market revenue was forecast to exceed 331.2 billion U.S. dollars. | Statista

Public cloud services are gaining a lot of traction. Startups, SMEs, and enterprises are recognizing the benefits of cloud and thus, are migrating to the most relevant service provider to improve ROI, efficiency, and time-to-market.

When moving to cloud, it is important to understand the different types of services that can be availed by an organization. Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) are three popular models of cloud services. The later segment discusses what they are, their benefits, differences, and how to choose the right according to business requirements. 

Software-as-a-Service (SaaS)

SaaS, also known as “on-demand software” is a software distribution model wherein a service provider hosts an application at a data center for customers to be accessed via the internet. Such a service frees up the customers from maintaining hardware or other resources to use the software. All that’s needed is a web browser or a client program. 

The source code of the software is the same for all the customers and any change/updation in the software is rolled out to all the subscribers of the software. Organizations also have the option to integrate SaaS solutions with their own applications using APIs. For example, a business can create its own software and integrate the functionality of a SaaS solution through APIs. 

Human capital management (HCM) software, collaboration software, and customer relationship management (CRM) software are amongst applications where SaaS has a high penetration rate. | Statista

Examples: Salesforce, Hubspot, MailChimp, Shopify, Slack 


  • Since the SaaS model doesn’t need to install and run applications, it saves organizations from the expense of hardware acquisition, maintenance, and software licensing.

  • For availing SaaS services, customers have the pay-as-you-go model. PAYG allows users to pay for the services only for the time it is utilized. 

  • A SaaS service can be scaled as required. Users can start with fewer features and functionalities of the software and then extend them as the demand strikes. 

  • With a SaaS solution, the updates are installed automatically. This automation reduces the stress from IT staff to keep a check on a few updates and changes that have been done for the betterment of the solution. 

Platform-as-a-Service (PaaS)

In this model of cloud computing, hardware and software tools are provided, primarily for application development. In this case, the cloud service provider hosts the hardware and software its own infrastructure and make it available for the users over the internet. This not only frees the organization from investing in hardware and software to run a new application (operating system, web servers, databases, and access to a programming-language(s) execution environment, etc.). Along with this, PaaS products enable the development team to collaborate and work together, irrespective of their physical location. 

By 2019, the platform as a service market is estimated to have a worth of 19 billion U.S. dollars. | Statista

Examples: Windows Azure, Google App Engine, AWS Elastic Beanstalk 


  • PaaS models reduce the CapEx cost of organizations that goes in providing hardware and software on-premise. PaaS providers charge a monthly fee on per user basis. 

  • Product-as-a-Service models provide agility to the software development cycle by making the much-needed tools and applications available, whenever needed. This helps to improve an application’s time to market as the development begins without delays.  

Infrastructure-as-a-Service (IaaS)

In this model of cloud computing, a cloud service provider hosts infrastructure components on cloud, which are usually hosted on-premise. These components may include but are not limited to servers, storage, and networking hardware. While platforms like AWS, Google Cloud are examples of public clouds, organizations can set up their own infrastructure on a private cloud. 

By 2019, the infrastructure as a service (IaaS) market is expected to have a worth of 38.9 billion U.S. dollars. | Statista 

Examples: Google Compute Engine, Rackspace, Amazon Web Services


  • IaaS platforms allow organizations to set up an infrastructure simply by running scripts. This not only includes deploying virtual servers but also has pre-configured databases, storage systems, load balancers, network infrastructure, etc.

  • Depending upon business requirements, IaaS allows to scale up or down resources. With such flexibility to scale the infra, it is possible for businesses to respond to the opportunities and challenges that come their way. 

  • IaaS model facilitates businesses to save significantly over CapEx and OpEx. Small businesses such as startups can start with small infrastructure and then scale as the business evolves. 

  • IaaS offers improved disaster recovery. For infrastructures that are geographically dispersed, disaster recovery and business continuity add up an extra cost and management challenges. An IaaS resolves this problem by providing a consolidated window to access the infra via the internet.

ALSO READ: The Ultimate Guide to Infrastructure Optimization on Cloud

SaaS VS PaaS VS IaaS

Every cloud model has specific features and functionality to offer that can respond to unique business requirements. Whether a software to manage routine tasks, a platform with storage options, or a fully-fledged infrastructure, there is a cloud service for almost everything. For availing the benefits that these cloud models offer, businesses can adopt a single or multi-cloud strategy considering cost, efficiency, and ROI of services. 

Topics: DevOps

Kartik Kakar

Written by Kartik Kakar

Lead Marketer at Daffodil Software. Inbound Marketer with a passion for technology and cool stuff.