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Difference Between IaaS, PaaS, SaaS

As a (frequent) visitor of, SaaS is not an alien concept to you . But SaaS is not the only acronym in circulation. There’s also IaaS, PaaS and even XaaS. What does it all mean? Are they the same, do they differ? How?

The origin of –aaS

Back in 1990, two guys names Prahalad and Hamel published a paper titled “The Core Competence of the Corporation”. In this article, they argue that a company can only be successful by continuous improvement.

Over time, a company builds its core competencies. These are the things the company is so great at, that it becomes a selling point. It’s the stuff a company has to be awesome at. Not everything a company does is a core competence. Cleaning the office, running the cafeteria, and managing the server space is not going to make a huge difference for the bottom line.

But it still has to be done. Instead of wasting their own time, energy, and attention on secondary activities, companies have started outsourcing such activities. In the nineties, this led to a huge outsourcing boom.

There is hardly a company where the cafeteria is not run by an outside company. Copiers are maintained by suppliers. Cleaning is done by specialized companies. At the same time, the role of IT in business grew. Companies saw that IT is essential to stay afloat. But it also became a bit of a headache. Developments were so fast, that companies couldn’t keep track. Specialists were rare and expensive. This lead to a new trend of outsourcing (part of) the IT department. IaaS, PaaS and SaaS are the result.


The similarity between IaaS, PaaS and SaaS

When looking at the three acronyms, the similarity stands out: all three end with -aaS. This is short for as-a-Service. Each of the three involves your company handing over responsibility to something you used to do in-house. Instead of “owning” it, you are renting it. In IT, we call this cloud computing. You subscribe to it, you use it, but you don’t have to bother about maintenance, updates, and security.


What are the differences between IaaS, PaaS, and SaaS

The difference between IaaS, PaaS, and SaaS is in that first letter, indicating how much of the responsibility you hand over.

IaaS, PaaS and SaaS - the piramid model
IaaS, PaaS, and SaaS – the pyramid model (Image: BuRnZ, CC0, via Wikimedia Commons)


IaaS is short for Infrastructure-as-a-service. This is the most basic version of cloud computing. Instead of buying IT infrastructure (servers and stuff like that), you rent server space. This is a Virtual Private Server (VPS).

The advantage of IaaS is partially practical and partially accounting-related. The practical advantage is that you don’t need to keep track of all the new hardware developments. Also, your infrastructure became easier to scale.

If your activity grows beyond what a single server can handle, buying a second server implies you are stuck with overcapacity (and higher costs). With IaaS, you just get more space and traffic, using a shared server.

The Accounting department is happy too, as they don’t need to put the infrastructure on the balance sheet. This reduces the financing need of the company and has a positive effect on metrics such as ROI. If you are thinking some companies chose IaaS to make shareholders happy, and nothing else…you might be right…

What you do not get with IaaS is…well…anything other than the hardware. Your IT department still needs to configure and manage the servers. You still have to choose the software and manage cybersecurity.

IaaS is the cheapest way of outsourcing some of your IT activities. You keep total control. However, you still need specialized know-how in-house. An example of an IaaS-provider is Amazon Web Services.

PaaS is the next step in outsourcing your IT. PaaS, short for Platform-as-a-service, provides you with a working platform. The hardware you’d get from IaaS is configured, managed, and maintained.

The operating system (OS), like Linux, is arranged, as is a collection of middleware you might need to do business (e.g. IIS, .NET, Apache, MySQL). A Database might be set up (dbPaaS), API management might be arranged for you (apimPaaS) or the platform might help you integrate several applications and programs. In short: the PaaS provider does all the technical stuff so that you can focus on doing the things your customers actually care about.

Companies using PaaS solutions no longer need to keep all the knowledge in-house, bringing an end to the nightmare of having to find and recruit scarce technical experts. There is a downside, though: the PaaS supplier chooses what software and middleware you get to use. The reduced flexibility is the price you pay for not having to worry about your IT platform anymore.

SaaS is the top level in IT outsourcing. Servers, configuration, setup, and use…it’s all done for the client. All they need to do is log in and use the cloud applications. Everything else is done by the SaaS company.


SaaS is front-end, the most visible of aaS-es and probably the best known. I mean, who doesn’t know Google Docs, Slack, Zoom or Dropbox (especially after 2020…)? And what about all these awesome SaaS companies? We all use it, and none of us really cares about what happens behind the scenes.

SaaS is the ultimate easy-to-use solution. But, obviously, you are restricted by what the supplier is willing to offer. For smaller and medium enterprises, SaaS is a Gift from the Gods. Larger companies, however, tend to want to do things their way. They often choose for partial SaaS and partial in-house development.


Difference between IaaS, PaaS, SaaS in short

To summarize the above: all aaS aim at lightening the workload of their customers. Any as-a-service supplier takes part of the work from you so that you can focus your attention on more important things (your core competencies). The difference is how far each of them goes. IaaS is hardware-related, PaaS offers a platform you can use to develop software and apps, whereas SaaS offers the apps you use for everyday business.


But what about XaaS?                                              

You might think we forgot about that last acronym. The thing is, XaaS is not “one thing”. The acronym stands for Anything-as-a-Service. It is the umbrella under which you find IaaS, PaaS, and SaaS. Technically, this would also include the cleaning services, but the phrase is used mostly in an IT setting. Basically, it just refers to anything you don’t do on-premise.


So, there ya go. The difference between IaaS, PaaS, and SaaS is now clear. Hopefully, next time you won’t feel like an ass when talking about -aaS.

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