IaaS vs PaaS vs SaaS: Differences, Examples and Diagram (2027)
Quick answer: The real difference in IaaS vs PaaS vs SaaS is how much of the technology stack you manage yourself. With IaaS (Infrastructure as a Service), you rent virtual servers, storage and networking, then install and run everything on top. With PaaS (Platform as a Service), the provider also runs the operating system and runtime, so you only deploy your code and data. With SaaS (Software as a Service), you log in to finished software while the provider handles everything underneath.
Key points
- The three labels come from NIST Special Publication 800-145, the US government’s official definition of cloud computing, published in September 2011.
- Your data, user accounts and access settings stay your responsibility in every model, including SaaS.
- Gartner forecasts worldwide IaaS spending of $287.3 billion in 2026, up 29.3% from 2025, with AI workloads driving much of that growth.
- PaaS often carries the highest lock in risk, because apps come to depend on platform specific services.
- FaaS, CaaS and DaaS are narrower slices of the same stack, not replacements for the big three.
What do IaaS, PaaS and SaaS stand for?
IaaS stands for Infrastructure as a Service, PaaS for Platform as a Service, and SaaS for Software as a Service. All three mean renting computing over the internet instead of buying and running it yourself. What changes is the layer where the provider stops and you take over.
The National Institute of Standards and Technology (NIST) set these definitions. IaaS lets you provision processing, storage and networks and run any software, operating systems included. PaaS lets you deploy applications built with the provider’s supported languages and tools, with no control over servers or the OS. SaaS hands you the provider’s own application, with little more than user settings to adjust.
Rows of server racks inside a modern cloud data center
How each cloud model works, with real examples
IaaS: you rent the machines
IaaS gives you virtual machines, disks and networks carved out of a provider’s data centers. The mechanism behind it is the hypervisor, software that splits one physical server into many isolated virtual servers. That is why a provider can sell you exactly 2 CPUs and 8 GB of memory and bill you by the second.
You install and patch the operating system, configure firewalls and deploy your apps. Examples include Amazon EC2, Azure Virtual Machines, Google Compute Engine and DigitalOcean Droplets.
PaaS: you bring the code
PaaS adds a managed operating system, runtime (Node.js, Python, .NET) and middleware. You push code, and the platform builds, runs, patches and often scales it. Examples include Azure App Service, AWS Elastic Beanstalk, Google App Engine and Heroku. Managed databases work the same way: with Amazon RDS, AWS patches the database engine and runs backups while you handle tables, users and queries.
SaaS: you just log in
SaaS is a finished application delivered through a browser or app, usually billed per user per month. Microsoft 365, Google Workspace, Salesforce, Zoom and Slack are everyday examples. You decide who gets access, how it’s configured and what data goes in.
For a simple explanation, the “Pizza as a Service” analogy from IBM software architect Albert Barron still works best. Making pizza at home is on premises. Take and bake is IaaS. Delivery is PaaS. Dining out is SaaS.
IaaS vs PaaS vs SaaS diagram: who manages each layer?
On premises means you manage all nine layers of the stack. IaaS hands the physical layers and virtualization to the provider. PaaS also hands over the operating system, middleware and runtime. SaaS hands over the application itself, but the data inside it stays yours.
| Stack layer | On premises | IaaS | PaaS | SaaS |
|---|---|---|---|---|
| Applications | You | You | You | Provider |
| Data | You | You | You | You |
| Runtime | You | You | Provider | Provider |
| Middleware | You | You | Provider | Provider |
| Operating system | You | You | Provider | Provider |
| Virtualization | You | Provider | Provider | Provider |
| Servers | You | Provider | Provider | Provider |
| Storage | You | Provider | Provider | Provider |
| Networking | You | Provider | Provider | Provider |
What most articles miss: the classic version of this diagram shades data as the provider’s job under SaaS. Microsoft and AWS both say otherwise.
IaaS vs PaaS vs SaaS comparison table
| Factor | IaaS | PaaS | SaaS |
|---|---|---|---|
| What you get | Virtual servers, storage, networks | Managed runtime and developer tools | A finished application |
| What you manage | OS, middleware, apps, data | Code, data, app settings | Users, settings, data |
| Main users | IT admins, DevOps teams | Developers | Everyone |
| Typical billing | Per second or hour of compute, per GB stored | Per instance, plan or usage | Per user per month |
| Control | Highest | Medium | Lowest |
| Time to start | Hours to days | Minutes to hours | Minutes |
| Lock in risk | Lower, since VMs move fairly easily | Often highest, due to platform specific services | Medium, depends on data export |
IaaS vs PaaS vs SaaS shared responsibility model
The provider always secures the physical data centers, hosts and network. You always own your data, identities, accounts and access policies. Everything in between shifts by model, and that middle zone is where most security mistakes happen.
Microsoft’s matrix (updated August 2026) shows the shifts. In IaaS, you own the operating system, network controls and applications. In PaaS, Microsoft takes over the operating system, while applications and network controls become shared. In SaaS, network controls move to Microsoft. AWS describes the same split as security “of” the cloud (AWS) versus security “in” the cloud (you), and it classifies Amazon EC2 as IaaS, where the customer handles all security configuration.
In practice, cloud breaches rarely start in a provider’s data center. They start with a storage bucket left public, an admin account without multifactor authentication, or a server nobody patched. Gartner predicted in 2019 that through 2025, 99% of cloud security failures would be the customer’s fault. These small business IT security best practices cover the customer side of that line.
IT security analyst reviewing cloud access settings on a laptop
IaaS vs PaaS vs SaaS examples on AWS, Azure and Google Cloud
AWS, Microsoft Azure and Google Cloud each sell services in every model, so classify the individual service, not the provider.
| Model | AWS | Microsoft Azure | Google Cloud |
|---|---|---|---|
| IaaS | Amazon EC2, Amazon S3 | Azure Virtual Machines, Azure Blob Storage | Compute Engine, Cloud Storage |
| PaaS | AWS Elastic Beanstalk, Amazon RDS | Azure App Service, Azure SQL Database | App Engine, Cloud SQL |
| SaaS | Amazon Connect | Microsoft 365, Dynamics 365 | Google Workspace |
| FaaS | AWS Lambda | Azure Functions | Cloud Run functions |
| CaaS | AWS Fargate, Amazon EKS | Azure Container Apps, AKS | Cloud Run, GKE |
Where do FaaS, CaaS, DaaS and XaaS fit?
FaaS and CaaS sit around the PaaS layer, DaaS delivers whole desktops, and XaaS is the umbrella term for anything sold “as a service.”
FaaS (Function as a Service) runs small pieces of code only when an event triggers them, such as a file upload. You pay per request and compute time and never manage a server. AWS Lambda popularized the idea after launching in 2014, and FaaS is often called serverless.
CaaS (Containers as a Service) runs containerized apps without you managing the virtual machines underneath, or gives you a managed Kubernetes cluster. You get more control than PaaS with less work than raw VMs.
DaaS (Desktop as a Service) streams a full Windows or Linux desktop from the cloud. Windows 365, Azure Virtual Desktop and Amazon WorkSpaces are the big names. Watch the acronym clash: DaaS sometimes means Data as a Service.
Which model should you choose?
Start with SaaS whenever a ready product does the job, move to PaaS when you build your own software, and use IaaS only when you need control the higher layers can’t give you.
- SaaS fits email, CRM, accounting, payroll and collaboration.
- PaaS fits custom apps when you don’t want to staff a team to patch servers.
- IaaS fits specific OS versions, legacy software, custom networking, GPU capacity or OS level compliance controls.
- FaaS or CaaS fits event driven tasks or apps your team already ships in containers.
Most people discover they end up with all three. A typical small business might use Microsoft 365 for email, host its website on Azure App Service, and keep one IaaS virtual machine for an old accounting package. Mapping that mix is part of planning your essential IT infrastructure for small businesses, and it shapes spend, so compare against typical IT budgets as a percentage of revenue by industry. If your team handles SaaS admin but struggles with patching servers, co managed IT services can split that work.
Small business team collaborating on cloud software at a shared desk
Common misconceptions and trade offs
“SaaS means the vendor protects my data.” Only partly. If an employee deletes a folder or a former staff member keeps access, that is on you.
“The cloud is always cheaper than on premises.” Not automatically. A server running flat out around the clock can cost more on IaaS than owned hardware, especially once data transfer fees appear. Savings come from right sizing and shutting down idle resources.
“PaaS removes all the work.” It removes server work, not decisions. Providers retire old runtime versions on their own schedule, forcing upgrades.
Frequently asked questions
Is AWS IaaS, PaaS or SaaS?
AWS offers all three. Amazon EC2 and Amazon S3 are IaaS, AWS Elastic Beanstalk and Amazon RDS are PaaS, and AWS Lambda is FaaS. The right question is which AWS service you mean.
Is Microsoft Azure IaaS or PaaS?
Azure is both. Azure Virtual Machines are IaaS, while Azure App Service and Azure SQL Database are PaaS.
Are Gmail and Netflix examples of SaaS?
Yes. Both deliver finished software over the internet that you use without installing servers or managing updates.
Is Salesforce SaaS or PaaS?
Salesforce is best known as SaaS, since its CRM products are ready to use. The company also offers a platform for building custom apps on its CRM data, which counts as PaaS.
Is Kubernetes IaaS or PaaS?
Neither, strictly. Kubernetes is open source container software, and managed versions like Amazon EKS, AKS and GKE are usually classed as CaaS.
Which cloud service model is the cheapest?
No model wins every time. SaaS usually has the most predictable cost because you pay per user. IaaS can be cheapest for skilled teams that tune resources, but it is also the easiest to overspend on.
Which cloud service model is the most secure?
Configuration matters more than the model. SaaS and PaaS shift patching to the provider, removing a common weak point. IaaS gives more control, but every setting from the OS upward becomes yours.
Can a business use IaaS, PaaS and SaaS together?
Yes, and most do. Just track who handles security for each piece, since duties differ even between services from one vendor.
What is the difference between FaaS and PaaS?
PaaS runs a whole application that stays online waiting for requests. FaaS runs individual functions only when triggered and bills per execution, with limits on run time and memory.
Is on premises better than the cloud?
It depends on the workload. On premises suits strict data residency rules, steady usage or specialized hardware, while the cloud lowers upfront costs for most small and midsize businesses.
Which cloud model should a small business start with?
Most should start with SaaS for email, file sharing and accounting because it needs almost no technical staff. Add PaaS or IaaS when you build custom apps or move an existing server.
Does SaaS back up my data automatically?
Not in the way most people assume. Providers protect their infrastructure against hardware failure, but retention windows for deleted files vary by product. Check your vendor’s terms and add a separate backup if losing data would hurt.
Conclusion
Once you see cloud computing as a stack, the IaaS vs PaaS vs SaaS question gets simple: pick the highest layer that still gives you the control you need, and stay clear about the security duties you keep. For the original definitions, read NIST Special Publication 800-145. For responsibility details, see Microsoft’s shared responsibility in the cloud guide and the AWS Shared Responsibility Model.