Understanding The Cloud Computing Biz Model: What Are SaaS, PaaS And IaaS?

While most investors have certainly heard about cloud computing, many aren’t familiar with what cloud computing is and what the different categories of cloud computing mean.

To start, cloud computing is a shift in the way computer services are provided. Instead of downloading software and apps or installing hardware on-site, cloud customers gain access to computer services via the internet.

The three main categories of cloud computing are Software as a Service (SaaS), Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).

SaaS is a model in which customers gain access to applications over the internet.

IaaS is a model in which a provider hosts its customers’ hardware, software, servers, files and other infrastructure components and provides them with security, backup and access.

Finally, PaaS is a model in which a provider allows customers to access hardware and software required to develop or run applications.

Related Link: Microsoft Was Late To The Cloud Party, But Could Grab Largest Share Of SaaS Market By 2020

Who's Leading Which Segment?

For investors, the biggest question is which companies are the leading names in these three segments of the rapidly-growing cloud computing business. In 2015, Goldman Sachs broke down the market leaders in each segment.

For SaaS, leaders include salesforce.com, inc. CRM, Automatic Data Processing ADP and Intuit Inc. INTU.

Leading IaaS named include Amazon.com, Inc. AMZN’s EC2, Rackspace Hosting, Inc. RAX and International Business Machines Corp. IBM’s SoftLayer.

Finally, leaders in the PaaS space include Amazon’s AWS Elastic Beanstalk, Microsoft Corporation MSFT’s Azure and salesforce’s Force.com.

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