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PaaS, IaaS and SaaS: 3 Terms You Need to Know


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The concept of cloud computing has existed for decades, and the phrase itself appeared in popular culture in 2006. But only in the past few years has the cloud come into its own as a tool for personal and business computing – and with its emergence, terms like PaaS, IaaS and SaaS (platform as a service, infrastructure as a service and software as a service, respectively) have become widely used in the IT sector.

But why do those acronyms matter for you? Because, quite simply, the future of IT will heavily involve the delivery of web-based applications as services. The trend is already evident in both consumer internet and the business world, and cloud adoption is certain to expand in the months and years to come. Here’s why PaaS, IaaS and SaaS technologies matter.

Infrastructure as a Service (IaaS)

IaaS enables companies of all sizes to access enterprise-grade computing hardware over the web. And with every passing year, more of the internet’s backbone is being provided by a handful of large IaaS providers – Amazon Web Services (AWS) chief among them. Every day, analytics firm Deepfield Networks reported earlier this year, a third of internet users visit an AWS-powered site, and Amazon hosting technology undergirds such popular web properties as Airbnb and Netflix.

Other IaaS providers are throwing their hats into the ring, as well. Game developer Zynga, for example, recently announced that it will offer cloud-based infrastructure to firms in need of an online gaming platform.

The principal advantages of IaaS are power, affordability and scalability. By purchasing infrastructure from a cloud services firm like AWS, a company gains access to robust computing resources at a reasonable pay-as-you-go rate. Should that company need to expand its online presence in the future, it simply orders more infrastructure from its IaaS provider.

Platform as a Service (PaaS)

PaaS is similar to IaaS in that it’s delivered through the internet – but it’s ready-to-use solutions, rather than just raw infrastructure, that PaaS users gain access to. The benefits of PaaS are similar to those of IaaS: Cloud platforms typically offer high-level functionality at a much lower price than traditional business systems, and they can be scaled up or down as conditions warrant.

An example of PaaS in action is RingCentral, which offers a full business phone solution as a cloud-based service. Whether a RingCentral customer has one line or 100, he or she can access the same suite of enterprise-quality features (auto attendant, visual voicemail, call forwarding and so on). And all it takes to change RingCentral’s account settings is a few mouse clicks.

Notably, RingCentral’s user-friendly features are available for much less than conventional business phone systems. Iatric Systems, a customer since 2010, saved 80 percent on phone service by switching from an on-premise system.

Plus, company CEO Joel Berman explains, there are fewer headaches with RingCentral. “We’re saving well over $100,000 a year and we don’t have to worry about infrastructure,” he says.

Software as a Service (SaaS)

SaaS is perhaps the most visible application of cloud computing. Many of the internet’s most popular properties – including Pandora, Dropbox and Evernote – are SaaS services: All three store files in the cloud and make them accessible via the web.

The value of SaaS applications is apparent to anyone who’s left important documents on a thumb drive or a CD. With SaaS storage from Dropbox or one of its competitors, files may be stored online and accessed from anywhere.

SaaS programs aren’t just easy to use – they often possess greater functionality than their offline counterparts. Witness the vast customizability and control afforded by customer relationship management application Salesforce, or the collaboration opportunities which Google Docs presents.

Whether they may be classified as IaaS, PaaS or SaaS, cloud services provide huge usability benefits (and can enable big cost savings). The tech industry is taking the cloud seriously: In addition to the above-mentioned examples, both Google and Apple are investing heavily in Drive and iCloud, their respective cloud-based file-storage platforms. Your business should be thinking about what the cloud can do, too.

Originally published Jul 30, 2012, updated Jun 15, 2021

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