IaaS vs PaaS: The Difference Explained

Want more content?

By subscribing to our mailing list, you will be enrolled to receive our latest blogs, product updates, industry news, and more!

Cloud computing is one of the most crucial business shifts of the decade. The ability to deploy entire business operations online is nothing short of revolutionary, opening up a host of benefits from cost reduction to 24/7 availability.

However, moving the cloud can be a complicated process. Different businesses have different needs, requiring various cloud models. But for the most part, you’ll be faced with the three most common ones: SaaS, PaaS, and IaaS. Understanding what each one does, including the pros and cons, is crucial for choosing the right approach for you.

IaaS vs. PaaS vs. SaaS: Differences in Cloud Computing

In a nutshell, the main difference regarding SaaS, PaaS, and IaaS comes down to which aspects of an operation are managed by the business and which are outsourced to a service provider. Let’s start with an on-premises setup to help us form a contrast. Here, the company is responsible for installing, housing, and maintaining everything, including the hardware and software.

In SaaS (meaning Software as a Service), everything is handled by the service provider. The client only needs to log in to the SaaS platform to use the software – no installation or updates are required. Hence, they’re also known as cloud application services.

PaaS, or Platform as a Service, provides the underlying hardware and other development tools. It’s often used by developers as a space to create software online without worrying about the underlying framework.

Finally, IaaS (Infrastructure as a Service) provides basic resources, such as storage, networking, and virtualization. It’s meant as a complete substitute for on-premises hosting, allowing a company to deploy and manage their entire operation to the cloud sans the need to invest in hardware.

What is IaaS?

IaaS is a service that gives companies everything they need to deploy a data operation on the cloud. This service is made up of individual resources, such as storage and networking, delivered through virtualization. Think of it as outsourcing the underlying hardware via the cloud.


Businesses and IT teams get the most flexibility with IaaS vs. SaaS and PaaS. It affords companies the freedom to deploy their operations any way they wish, without handling hardware installation and maintenance. The “pay-as-you-go” setup of IaaS means that companies only pay for resources as they use them, making it cost-efficient. The other benefit is that it’s easy to scale an operation to adapt to market needs.


While businesses usually have complete control over most of their infrastructure, there’s a critical aspect over which they don’t – security. IaaS can introduce vulnerabilities, so it’s crucial to pick a reputable provider with tight security. IaaS also requires additional training and human resources to implement effectively.

Infrastructure as a Service Examples

Popular IaaS examples include Amazon Web Services (AWS), Microsoft Azure, and the Google Compute Engine.

What is SaaS?

SaaS, or Software as a Service, delivers software directly to users via the Internet. Every aspect of the software, from installation and updating, is handled by the service provider. Thus, it’s the perfect setup for individuals or small businesses without a dedicated IT team.


The most significant advantage of SaaS is that it’s easy to use and deploy. You don’t need any special software and hardware, other than a computer and an Internet connection. In addition, the subscription fee of SaaS platforms is generally less expensive than the payroll costs of an IT team to maintain the software for you.


The lack of customization is the main disadvantage of the SaaS approach. Unfortunately, this also limits interoperability with other software platforms, a crucial workflow for larger organizations. In addition, SaaS suffers from the same data security vulnerabilities as IaaS and PaaS.

Software as a Service Examples

There are plenty of SaaS examples, and you likely use one every day. These include essentials like Google apps (such as Google Mail and Drive), Salesforce, and Microsoft 365.

What is PaaS?

Platform as a Service, like IaaS, also provides cloud computing resources and components for business operations. But the most significant difference between IaaS vs. PaaS has to do with complexity. PaaS resources operate at a higher layer, allowing programmers to focus on software development without worrying about the underlying hardware and operating system.


PaaS makes it relatively easy and cost-effective for businesses to deploy in-house software to the cloud. Developer tools make the process easier by reducing the complexity and coding needed for the project. In addition, PaaS makes it easy to scale the software if required.


While PaaS gives more flexibility than SaaS, it will still limit what you can do compared to an IaaS platform. Integration can also be a problem, especially with incompatible legacy systems. And finally, as with any cloud computing solution, security is always a concern.

Platform as a Service Examples

Some PaaS examples include Windows Azure, OpenShift, and the Google App Engine.

Security is the Biggest Problem with Cloud Computing

As you can see, the common thread with cloud computing is security – or rather, the lack of it. Unfortunately, because you often don’t have complete control over the infrastructure, your options are limited. Fortunately, tokenization is an effective way to protect sensitive data in the cloud, all while helping improve customer service. Contact TokenEx today to learn more.

Check out the TokenEx Blog for additional articles regarding everything from data security to PCI compliance.