Cloud providers sell the same underlying thing, computing power in someone else's data centre, at three very different levels of convenience. Understanding IaaS vs PaaS vs SaaS helps you compare offers fairly, estimate how much technical work each option leaves with your team, and avoid paying for control you will never use (or giving up control you actually need).
The pizza analogy, briefly
A common way to explain the three models is food. Cooking at home with your own kitchen is running your own servers. Buying a ready-to-bake pizza and using your oven is IaaS: someone else made the base, you do the rest. Ordering delivery is PaaS: the food arrives cooked, you supply the table and drinks. Eating at a restaurant is SaaS: you just turn up and eat. The analogy is imperfect, but it captures the key idea: each step up hands more of the work, and more of the decisions, to the provider.
IaaS vs PaaS vs SaaS: who manages what
| Layer | On-premises | IaaS | PaaS | SaaS |
|---|---|---|---|---|
| Application and data | You | You | You | Provider (you own the data) |
| Runtime and middleware | You | You | Provider | Provider |
| Operating system | You | You | Provider | Provider |
| Virtualisation | You | Provider | Provider | Provider |
| Servers, storage, network | You | Provider | Provider | Provider |
| Physical data centre | You | Provider | Provider | Provider |
Even in SaaS you remain responsible for who has access, how strong their passwords are, and what data you put in. No model removes that.
Infrastructure as a Service (IaaS)
IaaS rents you the raw building blocks: virtual machines, block storage, networks, load balancers and IP addresses. You choose the operating system, install the software, apply updates, and configure the firewall. In return you get almost complete flexibility; if it runs on Linux or Windows, it runs on IaaS.
Examples: Amazon EC2, Azure Virtual Machines, Google Compute Engine, and VPS products from many hosting companies such as DigitalOcean Droplets or Linode.
Good fit when:
- You are moving existing servers to the cloud with minimal changes.
- Your software needs specific OS versions, kernel modules or licensed components.
- You have, or can hire, people to handle patching, monitoring and backups. This is the work a server management service typically takes on.
Spinning up an IaaS server is quick, but everything after that is yours. A freshly created Ubuntu VM, for instance, still needs its packages updated and a firewall enabled:
sudo apt update && sudo apt upgrade -y
sudo ufw allow OpenSSH
sudo ufw enablePlatform as a Service (PaaS)
PaaS gives you a place to run your code without managing the servers underneath. You push an application, often straight from a Git repository, and the platform handles the operating system, runtime updates, scaling and much of the networking. Managed databases are also a form of PaaS: you get a connection string, the provider takes care of backups and patching.
Examples: Heroku, AWS Elastic Beanstalk, Azure App Service, Google App Engine and Cloud Run, plus managed databases such as Amazon RDS or Azure SQL Database.
Good fit when:
- You are building a new web application or API in a mainstream language.
- Your developers would rather ship features than tune servers.
- Traffic varies and you want scaling handled by configuration rather than by hand.
Watch out for: platform limits (request timeouts, file system that does not persist between deployments, restricted background processes) and lock-in to provider-specific features. Read the platform's limits page before you design around it.
Software as a Service (SaaS)
SaaS is finished software delivered over the internet, paid for by subscription. You do not install or host anything; you configure it and use it.
Examples: Microsoft 365, Google Workspace, Salesforce, Zoho, Slack, Shopify, Xero.
Good fit when: the job is a common business function (email, accounting, CRM, chat) and a standard product matches how you work closely enough. Building or hosting your own version of these rarely makes sense for a small or mid-sized company.
Watch out for: data export options, where data is stored, per-user pricing as you grow, and integrations. If a process is a genuine competitive advantage, a generic SaaS product may force you to work like everyone else.
Where serverless and containers fit
Newer services blur the lines. Serverless functions (AWS Lambda, Azure Functions, Google Cloud Run functions) are sometimes called Function as a Service; they sit beyond PaaS, since you hand over individual functions rather than a whole application. Managed container services such as Amazon ECS, Azure Container Apps or Google Kubernetes Engine sit between IaaS and PaaS: you package the software, the provider runs the cluster. The labels matter less than the underlying question: which layers do you want to manage yourself?
How to choose
Work through these questions for each workload:
- Does a SaaS product already do this well? If yes, start there.
- Are you writing custom code? If yes, check whether a PaaS supports your language, framework and background jobs.
- Do you need control of the OS, unusual software or legacy dependencies? Choose IaaS.
- Who will do the operational work? IaaS without someone to patch and monitor it is a security risk, not a saving.
Most businesses end up with a mix: SaaS for email and office work, PaaS or managed databases for new applications, and IaaS for the systems that need it. Our cloud solutions page describes how these pieces can be combined.
Key takeaways
- IaaS gives you virtual hardware; you manage everything from the OS up.
- PaaS runs your code for you; you manage the application and its data.
- SaaS is ready-made software; you manage users, settings and data.
- More convenience means less control. Choose per workload based on who will do the operational work.