Cloud computing models: XaaS, SaaS, PaaS, IaaS. How can you take advantage?

Before the emergence of cloud computing services, companies had to purchase licensed software products and configure infrastructure on-premise. Enterprises were also forced to acquire and install hardware and software to create applications. As a result, organizations had to spend a lot of time and effort setting up servers, maintaining systems, and scaling resources.

With cloud computing, businesses became able to significantly reduce expenses while improving time to market. Unlike on-premise solutions, cloud computing provides access to the necessary resources—such as networks, operating systems, data storage—over the Internet on demand.

Since cloud computing offers plenty of benefits, the demand for it has surged over the past years. Increased Internet and smartphone penetration, remote collaboration, as well as growing volumes of data are the key factors driving the widespread adoption of cloud computing. According to ReportLinker, the worldwide cloud computing market is predicted to spike from $445.3 billion in 2021 to $947.3 billion by 2026, at a CAGR of 16.3% during the indicated period.

Cloud computing has various delivery models, including software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS).

In this article, we will describe all of them in detail to help you find out how you can take advantage. But before we start, let’s consider what anything as a service (XaaS) is, so that you get a clear understanding of all concepts.

What is anything as a service?

Anything as a service encompasses any tools, applications, and resources that are delivered via the cloud. XaaS refers to any computing service that is accessed over the Internet on a subscription basis.

There are numerous types of XaaS:

• Software as a service
• Platform as a service
• Infrastructure as a service
• Storage as a service
• Mobility as a service
• Database as a service
• Communications as a service
• Network as a service
• Other

As XaaS is a broad category that includes a range of solutions, its operating model may be different for every enterprise.

XaaS services are generally governed by service level agreements (SLAs), in which vendors and their customers specify contract terms. With XaaS, organizations purchase what they need and pay for the resources that they actually utilize. This way, companies avoid the necessity to install, configure, and maintain software and hardware for performing the required tasks.

Anything as a service brings multiple advantages that involve cost savings, improved time to market, flexibility to focus on core business, scalability, and reliability. Now, let’s consider the most popular models that involve SaaS, PaaS, and IaaS.

Software as a service definition

Software as a service is a licensing and delivery model that offers access to a software solution on a subscription basis. Also known as on-demand software and web-hosted software, SaaS means that the app is deployed on external servers and is generally available via a web browser while users sign in with their logins and passwords. Thus, customers do not have to install the software on their desktops.

SaaS has the following characteristics:

• The system is hosted and maintained centrally by a SaaS provider.
• While many SaaS vendors employ a multi-tenant architecture, a software product has a single configuration only, which is used by all clients, or tenants.
• Technical support is included in the pricing.

As a rule, SaaS solutions are upgraded more frequently compared to traditional software, since providers aim to meet the requirements of their customers and gain a competitive edge. In this regard, new functionality and improvements are often delivered on a weekly or monthly basis.

Pricing of a SaaS model

The payment for using SaaS is typically charged either in the form of a monthly subscription fee or based on the volume of transactions. Freemium is another monetization strategy, in which users can utilize a part of functions but have to pay for accessing premium features.

The primary benefits of software as a service

A SaaS model has multiple advantages:

• Customers do not have to purchase, set up, and manage a software system.
• By turning to a SaaS vendor, companies avoid the need to build software from scratch, which consumes a lot of time and resources.
• Organizations significantly reduce maintenance and deployment costs.
• Since data is stored in the cloud, users can interact with the application from any place in the world via their web or mobile devices.
• As opposed to on-premises software, a SaaS model provides data backup and disaster recovery.

While SaaS provides a variety of benefits, there are some drawbacks that firms and institutions should consider. A SaaS model generally does not fit companies that want to integrate an application, which is highly customized to their business-specific needs and goals.

The risk of security breaches is another issue that you should take into account. When choosing a SaaS system, it is important to find out how the vendor safeguards sensitive data and sign in an agreement regulating all potential bottlenecks like the liability for data leakage.

Examples of popular SaaS solutions are:

• Slack — messaging
• Salesforce, Hubspot — CRM
• BigCommerce — e-commerce
• Dropbox — file storage
• MailChimp — email marketing
• Buffer — social media marketing
• Zendesk — customer service
• DocuSign — document signing
• Canva — graphic design
• Google Workspace (formerly G Suite) — online collaboration

Software as a service is utilized across the majority of business sectors, involving healthcare, insurance, education, retail, and hospitality. Enterprises employ SaaS in processes such as accounting, messaging, invoicing, digital marketing, customer relationship management (CRM), enterprise resource planning (ERP), and human resource management (HRM).

What is a platform as a service?

Platform as a service is a cloud computing model that enables customers to build, test, run, and deploy applications while avoiding the need to maintain infrastructure. PaaS vendors offer a cloud platform—involving servers, development tools, databases, networking, middleware, etc.—to manage the product lifecycle.

Basically, PaaS has three components:

• Cloud-based infrastructure comprises data storage, virtual machines, firewalls, virtualization, and operating systems.
• Development tools for creating and managing apps.
• A graphic user interface (GUI) that allows software engineers and DevOps professionals to perform the necessary tasks. As the GUI is available online, software experts can sign in via their tech devices and collaborate remotely.

The types of the platform as a service:

• Public. PaaS software runs on the public cloud, which means that numerous organizations employ the same platform simultaneously. In fact, a public PaaS delivers infinite computation power.
• Private. Companies use an isolated, private segment of the cloud, which is not available for third parties. In this case, a firm utilizes its own infrastructure and servers, which contributes to increased security.
• Hybrid. In this case, enterprises have the flexibility to choose which resources (i.e., apps, data) can be accessed via a public cloud and which are stored in a private cloud. Therefore, it is possible to move resources between the two clouds depending on business needs.

A private PaaS is the safest option that allows businesses to prevent technical risks and potential vulnerabilities. Organizations that operate with sensitive data and have to ensure compliance with security regulations (GDPR, HIPAA, etc.) should use a private PaaS model. Examples of such companies are providers of banking, financial, and healthcare services.

Pricing of a PaaS model

The idea behind the PaaS pricing is to charge customers for the resources they actually utilize, which is called the pay-as-you-go model. PaaS providers may also require a fixed fee for using a specified amount of resources.

The key advantages of the platform as a service

There are many benefits of PaaS:

• Improved time to market. Using PaaS, software engineers are not responsible for creating, configuring, and provisioning their own app development platforms and back-end infrastructure. Software experts only need to build and test software solutions. PaaS vendors, in their turn, perform tasks such as ongoing system support, resource allocation, and infrastructure maintenance.
• Lower costs. Enterprises are charged only for the resources they use. Hence, clients do not have to pay excessively for idle resources during periods of low traffic.
• Scalability. The scaling of on-premises software is expensive and resource-consuming. To handle heavy loads, businesses have to purchase additional computational and storage capacity. A PaaS model offers cost-effective scalability on-demand. With PaaS, companies can easily enable autoscaling of resources and load balancing. Find out why it is important to ensure scalability.
• Ease of licensing. Platform as a service providers acquire licenses for development tools, operating systems, and other components for managing the application lifecycle.
• Increased flexibility. PaaS vendors offer a shared software development environment that enables software engineers and DevOps experts to collaborate on projects remotely and use various programming tools available out of the box.

PaaS is often used in building microservices and serverless architectures that allow for achieving scalability, high availability, fault tolerance, and performance.

Examples of trusted PaaS vendors: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform.

At Arateg, our team employs PaaS solutions to automate app development, testing, and deployment while enabling scalability, resilience, and performance. Using technologies available in the PaaS tooling, our professionals implement features like two-factor authentication, role-based access permissions, and data encryption to ensure security.

What is infrastructure as a service?

In software development, infrastructure comprises a range of components (software, hardware, networks, operating system, etc.) that are used to manage IT environments, for instance, store data and deploy code. Servers, wires, appliances, and routers are parts of the infrastructure.

Traditionally, organizations hosted their information technology infrastructure on-premise. With the emergence and widespread adoption of cloud computing services, many enterprises migrated to infrastructure as a service.

IaaS is a cloud computing model, in which a provider hosts the infrastructure in the cloud on behalf of its clients. Customers, in their turn, access the infrastructure via the Internet. Like PaaS, IaaS includes servers, storage, and networking.

However, IaaS does not involve components such as development tools, databases, and middleware required to manage the app lifecycle. Therefore, any PaaS offers the necessary IaaS resources.

IaaS pricing

Delivering the infrastructure on-demand, IaaS vendors generally offer pay-as-you-go pricing.

The key benefits of infrastructure as a service

There is a variety of IaaS advantages:

• Lower expenses. With IaaS, organizations do not have to purchase, configure, and manage physical data centers, this way cutting down hardware and maintenance costs. As a result, IT experts are able to focus on core activities.
• Faster time to market. By using an IaaS cloud computing model, customers get the infrastructure ready in hours or even less instead of several days.
• Scalability and flexibility. An IaaS model allows for scaling IT resources up or down according to company needs. Since IaaS is available for employees over the Internet, they can access the infrastructure from any place in the world via their tech devices. This is especially useful during the remote collaboration that has to be established when extending a software development team. Additionally, the possibility to build remote workflows is crucial to ensure health safety during the time of COVID-19.
• Ease of maintenance. IaaS providers are responsible for infrastructure support and maintenance. An IaaS vendor has to address equipment issues and meet service-level agreements.
• Reliability. As the resources are located in external data centers, IaaS partners offer disaster recovery, which may be very costly when having on-premise infrastructure.

Examples of IaaS: All companies delivering PaaS give access to the cloud infrastructure, too. For instance, Microsoft Azure provides enterprise-grade infrastructure that comprises cloud compute capacity, storage, and networking services.