- On October 9, 2018
No matter how you look at it – the cloud is growing fast. According to Gartner, the worldwide public cloud services market is projected to grow 21.4 percent in 2018 to total $186.4 billion, up from $153.5 billion in 2017.
With the explosion of cloud computing, enterprises can now access infrastructure and resources on-demand as a service. IaaS, PaaS, and SaaS stand for the three main categories of cloud computing. Each of them provides a different approach to IT management.
Here’s a breakdown of the different ways businesses are monetizing cloud computing to offer customers different types of online services (article continues below):
SaaS or “Software as a Service”
“SaaS” stands for “software as a service.” It refers to cloud-based software that is hosted online by a company and is available for purchase on a subscription basis and is delivered via the internet.
Unlike traditional software, which is conventionally sold as a perpetual license with an up-front cost (and an optional ongoing support fee), SaaS providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee. Consequently, the initial setup cost for SaaS is typically lower than the equivalent enterprise software. SaaS vendors typically price their applications based on some usage parameters, such as the number of users using the application. However, because in a SaaS environment customers’ data resides with the SaaS vendor, opportunities also exist to charge per transaction, event, or another unit of value, such as the number of processors required.
Software as a service (SaaS) remains the largest segment of the cloud market, with revenue expected to grow 22.2 percent to reach $73.6 billion in 2018. Gartner expects SaaS to reach 45 percent of total application software spending by 2021.
A key driver of SaaS growth is the SaaS vendors’ ability to provide a price that is competitive with on-premises software. This is consistent with the traditional rationale for outsourcing IT systems, which involves applying economies of scale to application operation, i.e., an outside service provider may be able to offer better, cheaper, more reliable applications.
SaaS Examples: Gmail, Google Docs, Office 365, EventPro. Trello, Salesforce, Dropbox
Common SaaS Use-Case: Replaces traditional on-device software
As we already emphasized, SaaS does not require any technical skill or expertise and has user-friendly design. You do not need to install anything – the SaaS provider takes care of the heavy lifting so you can focus on your core business. Depending on usage, you can scale up and down your needs and access an application any time through a secure web connection across any device. SaaS makes it easier to deploy cutting-edge technology without the deployment and management overheads seen with on-premises software.
PaaS or “Platform as a Service”
PaaS stands for “platform as a service.” It refers to cloud-based platform services that provide developers with a framework they can use to build custom applications upon it. In this way, PaaS isn’t delivering software over the internet, but is providing an online platform that’s accessible to different developers to create software online.
The PaaS service delivery model allows a customer to rent virtualized servers and associated services used to run existing applications, or to design, develop, test, deploy and host applications. PaaS offerings include a variety of services and service combinations spanning the application development lifecycle. Typical service features include source code control and tracking, versioning, testing and built-in process management tools.
According to KPMG, Platform-as-a-Service adoption is predicted to be the fastest-growing sector of cloud platforms, growing from 32% in 2017 to 56% adoption in 2020.
PaaS Examples: Google App Engine, AWS Elastic Beanstalk, Microsot Azzure PaaS, Heroku
Common PaaS Use-Case: Best suited to a team of developers who want the freedom to build their own applications without having to worry about underlying tasks like runtime and traffic load management.
As well as offering the same fundamental benefits as IaaS, cloud PaaS further simplifies the development process. Platform as a service simplifies the development process with efficient lifestyle management by allowing building, testing, deploying, managing and updating web applications in the same integrated environment. It helps also to reduce coding time because all application components such as security, directory and search come pre-coded and built into the platform. PaaS operates on a pay-per-user model, meaning you can eliminate the cost of software licensing, yearly maintenance fees, patching and updates. The model speeds up the time to market for cross-platform applications, enabling a consistent experience across desktop, web browser and mobile and allowing remote teams to work on the same project regardless of location.
IaaS or „Infrastructure as a Service”
IaaS stands for “infrastructure as a service.” It refers to cloud-based infrastructure resources that are delivered to organizations via virtualization technology that help organizations build and manage their servers, network, operating systems, and data storage. IaaS customers can control their own data infrastructure without having to physically manage it on-site. Instead, they can access and store data on servers via a dashboard or API (application programming interface).
According to Gartner’s data, IaaS is the fastest-growing segment of the market among cloud system infrastructure services and is expected to grow by 27.6 percent in 2019 to reach $39.5 billion, up from $31 billion in 2018.
IaaS helps companies build and manage their data as they grow, paying for the storage and server space that they need to build hardware or software, without having to actually host and manage servers themselves on-site. IaaS products make up the foundations of building new technologies delivered over the cloud.
By 2022, Gartner expects that 90 percent of organizations purchasing public cloud IaaS will do so from an integrated IaaS and platform as a service (PaaS) provider, and will use both the IaaS and PaaS capabilities from that provider.
IaaS Examples: Amazon Web Services (AWS), Microsoft Azure, Google Cloud, Joyent, Cisco Metapod
Common IaaS Use-Case: Extends current data center infrastructure for temporary workloads (e.g. increased Christmas holiday site traffic)
An obvious benefit of moving to the IaaS model is lower infrastructure costs. With IaaS IT-teams may focus on the core business activities rather than the underlying infrastructure. IaaS eliminates the upfront cost of managing and setting up an on-site data center.
“The most wonderful advantage of IaaS is the capability to transfer work to the cloud during peak demand in on-premise systems.”
While there are advantages of keeping some workloads on-premises, the scale and flexibility of the cloud make it ideal for test and development and high-performance calculations. Amongst the key benefits of the cloud model is that it improves business continuity and disaster recovery, helps organizations to deploy new infrastructure in minutes and rapidly test new ideas. IaaS is responding quickly to evolving business demands with cloud elasticity.
However, since IaaS solutions involve multi-tenant architecture, it’s worth getting assurances about service availability before you commit to one particular provider.
Both users of cloud services and providers will agree that there are just too many options to choose from: SaaS, PaaS & IaaS – each of these have their own characteristic features and applications. While an end-user or business user would be interested in SaaS, there are high chances that a system administrator or a DevOps professional would be into IaaS. On the other hand, if you’re a true developer and want to focus on your code and not the rest, PaaS is the best choice for you.
No matter which option you choose – SaaS, PaaS or IaaS, migrating to the cloud is the future of business and technology as we know it. So, stay tuned for more.