Choosing between IaaS, PaaS, and SaaS is one of the most practical technology decisions a growing business faces. Each model splits responsibility differently between your team and the provider, and picking the wrong one means paying for control you do not need or giving up flexibility your operations depend on.
This post explains the three cloud computing models in plain English with a practical decision framework for Australian businesses.
If you are still building your understanding of cloud infrastructure, read our guide: What Is Infrastructure as a Service? 5 Game-Changing Examples for Small Businesses covers the fundamentals in more detail.
What Are Cloud Service Models?
Cloud service models describe the different ways a business can use cloud computing. Each model defines a different split of responsibility between your organisation and the provider, from who manages the servers to who handles software updates.
The three main models are:
- Infrastructure as a service (IaaS): Your provider manages the physical hardware. You manage operating systems, applications, and data.
- Platform as a service (PaaS): Your provider manages the infrastructure and development platform. Your team manages the applications, data, users, and configuration.
- Software as a service (SaaS): Your provider manages the application and underlying infrastructure. Your team still manages users, permissions, settings, and how the tool is used across the business.
Most businesses already use at least one of these cloud computing models, often without labelling it as ‘cloud’. Email platforms, accounting software, CRM systems, and project management tools are common examples of SaaS.
The question is which model fits the parts of your IT that need more control, flexibility, or capacity to scale. The Australian Cyber Security Centre provides guidance to help businesses understand cloud computing risks and assess whether a cloud service meets their security and operational needs.
IaaS, PaaS, and SaaS Compared
IaaS: More Control Without Owning Hardware
Infrastructure as a service gives your business virtualised servers, storage, and networking without owning physical equipment. You still manage your operating systems, applications, data, and security settings, while the provider manages the physical infrastructure behind the service.
IaaS suits businesses that need control over system configuration, want to run custom applications, or need to scale compute capacity up and down based on demand. It is often the right fit when your team needs control over the environment but wants to avoid the cost, maintenance, and lifecycle management of physical hardware.
For a business running line-of-business applications, databases, or custom server configurations, IaaS provides the flexibility to configure systems exactly as needed. You choose the operating system, control security settings, and decide when to apply updates.
PaaS: A Platform for Development
Platform as a service removes much of the underlying infrastructure management from your team. The provider manages servers, storage, networking, and the development platform itself.
Your team can focus on building and running applications, while the provider manages the infrastructure and platform services underneath.
PaaS suits businesses with development teams building custom applications, internal tools, or web-based services. It removes the overhead of managing infrastructure so developers can focus on code.
SaaS: Ready-to-Use Software
Software as a service delivers complete applications over the internet. The provider manages the application, updates, platform, and infrastructure. Your team still manages users, permissions, settings, integrations, and how the tool is used.
SaaS suits businesses that need ready-to-use tools such as email, accounting, CRM, document management, or collaboration platforms. Most organisations already rely on multiple SaaS products daily without realising they are using cloud computing.
The trade-off is reduced control. You usually cannot customise the underlying infrastructure, and your business depends on the provider’s update schedule, security model, and feature roadmap. Deployus helps clients manage and support their SaaS tools so they stay properly configured, secure, and aligned with how the business actually works.
How to Choose the Right Cloud Model
The right cloud computing model usually comes down to three things: how much control you need, what technical capability you have in-house, and what your budget allows for ongoing management.
For many businesses, the starting point is understanding where each workload sits today, what it needs to do, and whether moving it would actually improve performance, cost, or resilience. Cloud Migration Services can help clarify the path forward.
A simple decision framework looks like this:
- Choose IaaS if you need to run custom applications, control your server environment, or scale infrastructure without buying hardware.
- Choose PaaS if your team builds software and wants to focus on applications rather than managing servers and platforms.
- Choose SaaS if you need ready-to-use business tools with minimal technical overhead.
In practice, most businesses use a combination of all three. The key is deciding which model best supports each workload, based on how important it is, how much control it needs, and how much management your team can realistically take on.
Getting this right means looking at both the technical requirements and the long-term budget impact of each option. An IT Consulting & IT Strategy Services engagement can help map the right models to your specific business needs.
IaaS typically requires more ongoing management than SaaS, but it also gives you more control over how systems are configured, secured, and scaled. SaaS is simpler to operate, but it can limit flexibility because your business depends on the provider’s features, pricing, integrations, and update cycle.
The cost model also matters for budget planning. IaaS can reduce upfront hardware spend, although usage and management costs still need to be monitored. SaaS usually spreads costs across per-user or subscription-based licensing.
Gartner forecast that worldwide public cloud end-user spending would reach US$723.4 billion, reflecting how widely businesses are adopting these models to manage cost and scale.
Choosing the Right Cloud Fit
Once you understand where IaaS, PaaS, and SaaS each fit, the next step is mapping your current systems and workloads to the model that gives your business the right balance of control, cost, and simplicity.
The right answer is rarely one model across the board. Some systems may work best as SaaS, others may need the flexibility of IaaS, and some workloads may still belong in an onsite or hybrid environment.
Deployus helps businesses assess their current systems, understand the trade-offs, and choose a practical cloud model based on performance, security, support needs, and budget.
Need help deciding what belongs in the cloud and what does not? Deployus can review your environment and recommend a practical path forward through its IaaS services.
Frequently Asked Questions
What is the difference between IaaS, PaaS, and SaaS?
IaaS, PaaS, and SaaS each split responsibility differently. With IaaS, you manage applications and operating systems while the provider handles hardware. With PaaS, you mainly manage applications, data, access, and configuration. With SaaS, the provider manages the software and infrastructure, while your business still manages users, permissions, settings, and data use. The right model depends on how much control your business needs over the environment.
Which cloud service model is best for small businesses?
Most small businesses already use SaaS for everyday tools like email and accounting. IaaS suits businesses that need more control over infrastructure without owning hardware. The best cloud service model depends on your team’s technical capacity and what your budget allows for ongoing management.
What does infrastructure as a service include?
Infrastructure as a service includes virtualised servers, storage, networking, and compute resources delivered over the internet. The business manages its own operating systems, applications, and data while the provider maintains the physical hardware underneath.
Is PaaS or IaaS better for a growing business?
IaaS gives more control over the server environment and suits businesses that need flexible infrastructure they can configure themselves. PaaS removes infrastructure management so teams can focus on development. When comparing IaaS vs PaaS, growing businesses that need adaptable infrastructure and more control may benefit from IaaS, while teams focused on building applications may be better suited to PaaS.