Cloud Service Models Saas, IaaS, PaaS –
Choose the Right One for Your Business

Table of Contents

A Quick Introduction to Cloud Service Models

Cloud computing services and models are gaining tremendous momentum, with more businesses migrating their workloads from on-premise infrastructures to cloud. The ability to use IT infrastructure, software applications, and platforms via the internet has transformed the way businesses operate today. Brands selling products and services online, such as ecommerce companies, virtual collaboration apps, elearning, and telehealth providers leverage at least one or all of the cloud service models to run their business successfully.
A robust cloud strategy is inevitable to build a successful business strategy. And the most important part of your cloud strategy is to choose the right cloud service model(s) for your organization. Cloud service models are part of the broader trend – “Everything as a Service” or “XaaS.” As you explore the cloud service models, you will find options like IaaS, SaaS, PaaS, and similar terms. Choosing the right cloud service model depends on your infrastructure availability, portability of your application and data, IT staff and resources, cost considerations, compliance specifications, cloud security requirements, and scalability needs. Every cloud service model provides different levels of control and management. So, it’s important to know which model makes the most sense for your business needs.
Statista reports that in 2021, the total global spending on public IT cloud services amounted to almost 409 billion USD. The largest spending segment was Software as a Service (SaaS), with an approximate annual revenue of 249 billion USD. More legacy business applications are getting replaced with data-driven SaaS applications, ideal for modern cloud architectures. Choosing one or more cloud service models will save your money on hardware and software, and help you manage business applications with greater flexibility and speed, and minimal vendor lock-in.
Source: IDC Worldwide Semiannual Public Cloud Services Tracker, 2H 2021

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Why Does Your Business Need Cloud Computing?

Cloud helps create more seamless business solutions by integrating your applications, deployments, and networks. It provides numerous opportunities to design and deliver new digital services for your customers and employees. Cloud enables your business to respond quickly to the changing needs during periods of disruption. Here are a few reasons why your business needs cloud computing solutions.

High Performance and Availability

Cloud services are distributed across multiple cloud facilities. This eliminates your downtime, ensuring high availability. Your cloud service provider will be responsible for updating cloud systems, fixing bugs, and solving security issues in the cloud. The performance gains offered by cloud is higher than that of on-premise infrastructure.

Scalability and Flexibility

Cloud computing allows you to quickly scale up or down your computing resources and storage to meet the changing business needs. You don’t have to invest heavily in any physical infrastructure to support the changes, such as an increase in the load levels.

Effective Collaboration

Cloud storage makes your data available anywhere, anytime you need it. Location or device constraints don’t prevent you from accessing your data from anywhere in the world. As long as you have a stable internet connection and a computing device (a laptop or smartphone) in your hand, you can collaborate effectively with anyone, in any part of the world.

Cost Savings

When you choose a cloud service model, you only pay for the resources that you actually use. Most cloud computing services are pay as you go or pay per use. This is a great money saver for startups and small businesses with lower budgets. Your IT team doesn’t have to overbuild or overprovision your data center, so they get more time to focus on strategic work.

Advanced Security

Centralized data backups in the cloud provider’s data centers eliminate the need for maintaining your own backups onsite or offsite. This mitigates the risk of data loss in the wake of a disaster. Cloud providers can help restore your data from the cloud storage, which is automatically updated in real-time. To provide more robust protection, you can implement cloud security techniques, such as data encryption and two-factor authentication

What are Cloud Service Models?

Based on the level of flexibility, control, and management you need, you can decide how you want to deploy cloud for managing enterprise workloads. There are three main types of cloud computing service models – SaaS (Software as a Service), IaaS (Infrastructure as a Service), and PaaS (Platform as a Service).

Adopting Cloud – Choosing Between SaaS, IaaS, and PaaS

All the three cloud service delivery models – SaaS, IaaS, and PaaS – offer enterprises unique advantages in terms of cloud application development, deployment, and maintenance. By comparing each model, you can decide which cloud model is right for your business requirements.

SaaS

SaaS Benefits

  • Lower up-front costs and TCO: SaaS eliminates the need for additional hardware and software, reducing the installation and implementation costs.
  • Anywhere accessibility: With SaaS, you can access cloud services from anywhere using an internet-enabled device such as a smartphone or laptop. SaaS eliminates the physical constraints of on-premise software.
  • Ready to use: You can quickly set up SaaS services, so they become fully functional in minimal time. All it takes is that you sign up for the service (pay on-demand) to get access to fast and powerful computing resources.

Why Should You Opt SaaS?

SaaS is the ideal choice for small businesses and startups that do not have the necessary budget and resources to deploy on-premise hardware. SaaS applications have simplified remote collaboration, transferring of content, and scheduling virtual meetings in a pandemic-affected world. Companies that require frequent collaboration on their projects will find SaaS platforms useful.
Statista estimates that by the end of 2022, the worldwide SaaS end-user spending will be valued at 171.9 billion USD, 16% more than what it was in 2021. Supply Chain Management, Business Intelligence, Enterprise Resource Planning (ERP), and Project and Portfolio Management will see the fastest growth in end-user spending on SaaS applications, through 2022.

Points to Consider Before SaaS Implementation

  • Opting for “configuration over customization” will allow you to tailor the SaaS solution without extensive customization. This saves your time as you don’t have to worry about scaling with constant updates and documentation.
  • Understand the adoption and usage rates of the SaaS solution carefully, and set clear objectives that you want to achieve with the SaaS adoption.
  • Complement your SaaS solution with third-party integrations and advanced cloud security options to make it more user-centric, secure, and data-driven.

IaaS

IaaS Benefits

  • Lower costs: IaaS cloud model eliminates the need to deploy expensive on-premise hardware. Developers, DevOps, and DevTest teams get more freedom to experiment and innovate by saving the time and money spent on provisioning and scaling environments.
  • On-demand availability and scalability: As the most flexible cloud computing model, IaaS allows you to scale the computing resources up or down rapidly according to the needs of your enterprise.
  • Faster time to market: IaaS ensures faster development cycles by allowing you to quickly spin up the necessary computing infrastructure. You don’t have to wait for weeks and months for it to be ready.

Why Should You Opt IaaS?

IaaS is the most flexible cloud model that helps manage and customize your IT hardware infrastructure according to your requirements. Whether you are running a startup, a small business, or a large enterprise, IaaS gives you access to all the essential computing resources, including storage, computing, and networking, without forcing you to purchase them.
ResearchAndMarkets reports that the global IaaS market value is projected to reach $279.5 billion by 2027 at a CAGR of 27.2%. Sharing large amounts of information over the cloud will reduce your capital expenditure and convert it into operational expenses, making IaaS a highly cost-effective way to support your operations.

Points to Consider Before IaaS Implementation

  • Consider your technical, storage, computing, and networking needs while looking to implement an IaaS solution.
  • Data security is highly important while evaluating cloud services and providers.
  • Look for disaster recovery features, server size, throughput of the network, and the general manageability requirements.

PaaS

PaaS Benefits

  • Speed to market: Your cloud provider does all the heavy-lifting by providing your developers instant access to a complete application development platform, which is built and managed by them. It gives your team more time to develop and deploy.
  • Mitigates security risks: Your PaaS provider is responsible for securing the infrastructure. The PaaS model strengthens security by increasing business resiliency, reducing downtime, preventing data loss, and accelerating recovery.
  • Bolsters IT efficiency: PaaS standardizes deployments, improves scalability, pushes automation of routine tasks, and speeds provisioning to make your IT more responsive to innovative business opportunities. For example, PaaS accelerates your release cycles using containers and APIs, and enhances data recovery and analytics.

Why Should You Opt PaaS?

PaaS is a great choice if your project involves multiple developers and vendors. PaaS solutions are specific to application and software development and typically include cloud infrastructure, middleware software, and user interface. You don’t have to face the hurdles like procuring, deploying, running, and managing infrastructure. PaaS reduces the operational burden on developers and ITOps teams.
Developers only need to write the code and manage the apps and data, while the software development platform is maintained and managed by the PaaS provider. This significantly lowers your development cycle. It is easy to create customized applications as the PaaS provider leases all the essential computing and networking resources.
According to Statista, the global platform as a service (PaaS) market is estimated to be worth approximately 136 billion USD in 2023. Currently, PaaS accounts for about 20% of the worldwide cloud services market.

Points to Consider Before PaaS Implementation

  • Ensure you can easily scale with your PaaS provider and they have all the options available which you need.
  • Check if the PaaS solution is optimized for the language and framework you’re using. Otherwise runtime will be affected.
  • Decide where you want to deploy your application - on a private or public cloud.
  • Identify the level of automation and customization you require - whether it needs to be self-service or fully automated.

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Why is it Important to Choose the Right Cloud Service Model?

The rise of remote and hybrid work culture, which became a common trend during the COVID-19 pandemic, has increased the need for streamlined workplace collaboration and secure data storage facilities. Cloud computing has the potential to drive efficiency and uncover new opportunities for companies functioning remotely, without the need for any significant capital investment. Cloud helps businesses, customers, partners, and employees to stay connected, regardless of where they are located. However, it is essential to choose the right cloud service model to truly gain the advantage and remain competitive in the market.
The ultimate requirement of any enterprise today is to quickly adapt to the growing market changes and address the rising consumer demands. To achieve this, you need to implement the latest technologies, such as automation, Artificial Intelligence, IoT, facial and biometric recognition, AR, VR, and Blockchain. But all of that is possible only if you have a robust cloud infrastructure and cloud-based software.
Implementing the right cloud service model helps meet your enterprise’s infrastructure needs in the shortest span, without any heavy investment. It provides you the flexibility to scale your computing resources, adapt to new company processes and workflows, design new products and services, and accomplish business transformation with ease.

Criteria to Select The Right Cloud Service Provider

Understand your specific business needs before selecting a cloud service provider. Prepare a checklist including all your requirements related to technical, data governance, security, and service management. Assess the potential cloud vendors by comparing them against your checklist. Here are some key areas to consider.
  • Verify if the cloud service provider complies with recognised standards and quality frameworks. Look for vendors who are accredited with certifications such as ISO 27001.
  • Evaluate the service provider’s technologies and service roadmap for development. Ensure their platform and technologies align with your cloud objectives and IT environment. Find out if their service roadmap fits your requirements in the long term.
  • Look for providers who give you choice and control regarding the jurisdiction in which your data is stored, processed and managed. Make sure the provider’s data loss and breach notification processes are aligned with your organization’s data governance and risk management obligations.
  • Assess the cloud provider’s service dependencies and partnerships, including multiple vendor relationships, connected components, subcontractors, implications of service dependencies on SLAs, accountability, responsibility, service disruption policies, and limitations of liability.
  • Get clarity on the roles and responsibilities related to services and deliverables, contracts, SLAs, policies related to security, data management and conversion, backup and resilience provisions, legal protection, pricing models, exclusions, caveats, remediation policies, and penalties.
  • Analyze if the provider follows an established, documented, and proven process to manage planned and unplanned downtimes. Evaluate their ability to support your data preservation expectations.
  • To avoid the risk of vendor lock-in, look for providers who use minimal proprietary technology. This increases your ability to migrate or transition to a competitor cloud service, based on your growing business needs.
  • Finally, assess the technical and operational capabilities of a cloud service provider by evaluating their company profile and portfolios, client reviews, analyst profiles, ratings, and market position. Cloud providers who run a sound business offer the most compatible and competitive cloud service.

How Can Cloud Support Your Custom Software Needs?

The capabilities and offerings of cloud are not limited to data storage, recovery, or backup. Cloud helps manage your company’s complex IT operations, including setting up and running an environment for custom software development. Cloud service models like Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) offer the right ecosystem to build custom software applications. PaaS offers users a suite of prebuilt tools to develop, customize, and test your own applications.

SaaS vs. IaaS vs. PaaS: Which Cloud Service Model Fits Your Business?

Choosing a cloud service model for your business should be based on the level of flexibility, control, and management you need. A few potential scenarios are listed here.

When Do You Need SaaS?

Select SaaS cloud model when you want to:
  • Benefit from application usage without the need to maintain and update infrastructure and components
  • Don’t want to reinstall applications or purchase new licenses each time you switch to a new device
  • Cut down on internal IT overhead and retain only your subscription cost of the SaaS application
  • Gain more compute power and database storage depending on your usage. Your SaaS provider handles scaling up the application.
  • Great deal of flexibility to operate from any device, any location, any time
  • Great deal of flexibility to operate from any device, any location, any time

When Do You Need IaaS?

Select IaaS cloud model when you want to:
  • Consolidate heterogeneous disaster recovery systems into one virtualized environment
  • Perform big data analysis that requires a lot of processing power
  • Manage unexpected traffic spikes by scaling on-demand
  • Get new projects up and running quickly, according to changing business priorities
  • Overcome application performance limitations caused by capacity constraints
  • Experience business growth that outstrips infrastructure capabilities

When Do You Need PaaS?

Select PaaS cloud model when you want to:
  • Develop or host new custom applications without any hassles and costs of installing hardware or software
  • Free your developers to focus on their application code through simpler, faster, and secure app development
  • Analyze and mine your data, find insights and patterns, and predict outcomes to improve forecasting, product designs, ROI, and other business decisions
  • Use sophisticated software development kits and BI and analytics tools that you can’t afford to purchase outright
  • Develop for multi-platforms, including mobile and web browsers using the same code base
  • Implement agile methodologies that allow you to test and prototype new applications more quickly than usual to gather user feedback

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Top Cloud Computing Trends To Follow

The massive ongoing adoption of cloud computing has been a key enabler of the most transformative tech trends that businesses need to leverage today.

1 Hybrid Cloud and Multi-Cloud

Early cloud services typically asked the user to choose between private and public cloud solutions. When public cloud offered more pay as you go services, private cloud systems focused on providing more secure data storage.
The rise of hybrid cloud aims to offer users the best of both worlds. Hybrid cloud combines public cloud and on-premises infrastructure, including private cloud, to enable data and applications to be shared between them. Multi-cloud computing refers to using multiple cloud computing services from more than one cloud provider, including private and public clouds, in a heterogeneous environment.
Example of Multi-Cloud Example of Hybrid Cloud
An organization hosting its web front-end application on AWS, while keeping its Exchange servers on Microsoft Azure Combining your on-premises data center with a public cloud computing environment like Google Cloud
According to Flexera’s State of The Cloud Report, 89% of organizations reported having a multi-cloud strategy and 80% are taking a hybrid approach, as of 2022.
Source: Flexera 2022 State of The Cloud Report

2 Cloud-Fueled AI and ML

Cloud-fueled AI and ML allow organizations to access the computing power and resources they need to drive innovation, uncover in-depth insights, and make their operations more efficient and cost-effective. Some of the recent AI/ML use cases in customized marketing, recommendations to upsell and cross-sell, healthcare analysis during COVID-19, and logistics and distribution efficiency were made truly possible with the support of cloud services. The disposability, elasticity, and scalability of cloud infrastructure can boost AI and ML software applications. Cloud offers access to large-scale data stores and compute resources that can infer, store, and process high-velocity real-time streaming data, mandatory for training AI models.
Gartner predicts that by 2023, cloud-based AI will increase up to five times from 2019, making AI one of the top cloud services.

3 Cloud Security

The growth of the cloud computing landscape has triggered the need for robust cloud security provisions. To strike the right balance between productivity and security, organizations will opt for multi-cloud security that best aligns with their varying platforms. To prevent hackers from targeting the weak links in the supply chain, cybersecurity experts will devise measures to stop cyber attackers from moving laterally. This can be done by reducing the privileges and entitlements for every internal and external identity. Secure Access Service Edge (SASE) and Zero Trust frameworks will enable fast and secure cloud adoption.
TechRepublic reports that the global cloud security market will surpass $123 billion by 2032.

4 Low-Code and No-Code Cloud Services

Widespread dispersal of organizations and distributed workplaces have accelerated the low-code and no-code movement. People with little or no developer experience (non-IT professionals or citizen developers) can leverage no-code/ low-code frameworks to quickly create scalable business applications that meet the changing industry demands. Pre-built functions and integrations and drag-and-drop functionality of low-code/ no-code platforms empower your workforce to automate workflows and case management activities, integrate with existing systems, incorporate complex business logic, and drive a slick user experience.
According to Statista, the global low-code platform market revenue is estimated to be worth 65 billion USD in 2027, with a projected CAGR of 26% over the forecast period 2018-2025.

5 Serverless Cloud Computing

Serverless computing redefines the way enterprises develop, deploy, and integrate cloud-native applications by eliminating the need for manual infrastructure provisioning and management. It allows developers to focus on optimizing code and application design, without worrying about code execution as it is handled by the cloud service provider. Serverless helps tackle the problem of allocating cloud compute resources by automating scaling decisions of workload services in line with actual service demand. Efficient allocation and usage of cloud resources lead to better cost savings, by avoiding both waste and loss.
According to Gartner, the best manifestation of serverless computing is “function Platform as a Service”, or fPaaS. Gartner predicts that by 2025, 50% of global enterprises will have deployed fPaaS, up from only 20% today.

How Does Fingent Help You Adopt The Right Cloud Service Model?

Despite knowing that cloud is their destination, some organizations get stranded in the middle of an experimental mindset that slows down their efforts to adopt and scale to cloud. Fingent helps such organizations identify a clear business case for scaling up their use of cloud. Our cloud application development, implementation, and maintenance services have helped leading brands, including Fortune 500 companies to outmaneuver uncertainties and sustain operations under severe disruption.
Fingent helps migrate your workloads to the cloud rapidly and securely by selecting the right infrastructure for your needs. We help leverage the innovation and investments made by leading cloud providers, such as AWS, Azure, Google Cloud, SAP, IBM Cloud, and others to work for your business. Using cloud-native architectures, applications and data, we help accelerate your organizational speed and agility. Our cloud infrastructure maintenance and development services are designed to ensure higher levels of business performance and sustainability.
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Frequently Asked Questions on Cloud Service Models

Based on the type of service offered, there are three kinds of cloud service models: Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS).
SaaS examples: Microsoft 365, Google Workspace, Slack
IaaS examples: Amazon Web Services, Microsoft Azure, Google Compute Engine
PaaS examples: AWS Elastic Beanstalk, Google App Engine, VMware Cloud Foundry
The most commonly used cloud service model is Software as a Service (SaaS), with the global SaaS market share projected to reach $145 billion in revenue by the end of 2022, according to research analyst Gartner.
Before selecting a cloud service provider, you need to verify their technology and service roadmap, certifications and industry standards, SLAs, terms, and conditions, disaster recovery and backup resilience plans, cybersecurity policies, data governance and management, downtime planning, company profile, clientele, migration support, steps to avoid vendor lock-in, and similar factors.
The most maintenance free cloud service model is Software as a Service. SaaS enables companies to benefit from application usage without the need to maintain and update infrastructure, platform, and application components. Some of the most commonly used online office tools, collaboration apps, ERPs, and email are SaaS-based.
Platform as a Service (PaaS) is the most cost-effective way for developers to focus on building a highly optimized application, without bothering about software updates on the backend. Businesses don’t need to invest in expensive hardware as the PaaS vendors provide and maintain hardware infrastructure: servers, storage, and networking resources.

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