What is the difference between IaaS, SaaS, and PaaS?

"Cloud Computing" is a term often heard in technology sales conversations and tech forums but what is it, exactly? Cloud computing is an umbrella term used describe infrastructure as a service, platform as a service, and software as a service: IaaS, PaaS, & SaaS.

Software as a Service: 

Software as a Service (SaaS) is the most straightforward cloud computing concept. It's simply software that is created, housed, and accessed online.  It's typically managed entirely by the software provider, including updates, maintenance, and security. Businesses can access this software without having to install it locally on a computer or server, though downloadable extensions or add-ins may be available.   For this category of cloud computing, applications are often subscription-based and require users to log in through an internet browser.

Platform as a Service:

Platform as a Service (PaaS) is typically used by software and application developers and is less common among small businesses.  Clients who purchase a PaaS are buying a slice of a platform to develop, test, and run applications without purchasing and managing complex and expensive IT infrastructure and hardware needed to support their app. The platform includes the servers, storage, operating systems, and maintenance of that Infrastructure.  Free of managing complex infrastructure, companies who purchase PaaS are free to focus on building, launching, and scaling the application they're developing.

Infrastructure as a Service:

Companies sign up for Infrastructure as a Service (IaaS) when they want to take advantage of virtual computing and reduce physical IT infrastructure.  IaaS can be considered a step above PaaS:  IaaS providers manage the physical servers, storage, and networking, as well as virtual computers and servers used to manage business operations.  IaaS stops short of providing an operating system on virtual computers. Clients must license VMs appropriately and install operating systems such as Windows or Ubuntu. However, virtual computing can be highly efficient and easily scalable, providing secure "work from anywhere" solutions for growing businesses.