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IaaS vs PaaS vs SaaS for Software Founders: What to Choose and When?

by Vitaliy Podoba
Vitaliy Podoba avatar

In 2021, the percentage of mid-size enterprises using cloud computing had grown to 53% compared to 46% in 2020. 

So, more than half of mid-size businesses use the power of the cloud. And this number is even more impressive among large-scale enterprises, as 72% of such businesses already rely on cloud computing. 

What does this mean to you? 

There’s a great demand for cloud technologies that need to be satisfied. 

And you, as a software founder, are the one to give various businesses what they need. 

But which cloud computing software model should you choose?

The three main variants are IaaS, PaaS, and SaaS. 

And this article will help you understand which variant fits you better. 

Continue reading to know the main differences between these three models, their main advantages and disadvantages, IaaS, PaaS, and SaaS examples, and the cases for each model. 

Why Cloud Computing?

First and foremost, it is trendy. 

Like, the demand for cloud technologies grows at an ever-increasing pace. 

By 2025, the amount of data stored in the cloud will exceed 100 zettabytes

Hence, more and more businesses will move to the cloud because of its many benefits.

The main selling points that keep on attracting digitized businesses to various cloud models are scalability, handled maintenance, speed, and cost-efficiency. 

Also, don’t forget about the support from such giants as GCP, AWS, and Microsoft Azure

Most cloud solutions are built on top of the technologies provided by these brands, known for their impeccable reputation.
No wonder many business owners now know a definite answer to the ancient cloud vs on-premises debate.

The 3 Types of Cloud Computing Service Models Explained

Now, let’s dive into the variations of cloud computing service models. These are IaaS, PaaS, and SaaS, and they deserve to be explained in detail. 

  • IaaS (infrastructure as a service) is a cloud computing model that provides storage and networking resources on demand. It usually runs on a pay-as-you-go basis and provides the most fundamental cloud system parts to the user. In simple words, you provide a cloud infrastructure on which a user can build his or her solutions. 

  • PaaS (platform as a service) is a cloud computing model that provides the user with a complete deployment environment in the cloud. It offers both software and infrastructure. So, in simple words, it may be viewed as a fundament on which a user can build an app with some feature limitations. 

  • SaaS (software as a service) is a cloud computing model that provides a user with a ready-to-go solution. It is an already-built software product with functionality that is defined by the provider. And, in most cases, SaaS works on a subscription basis. 

For more clarity, check out the next chapter which illustrates the main differences between the three models. 

What are the differences between IaaS, PaaS, and SaaS?

So, here’s the table that shows the main differences between IaaS, PaaS, and SaaS.

Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS)
Applications Applications Applications
Data Data Data
Runtime Runtime Runtime
Middleware Middleware Middleware
Virtualization Virtualization Virtualization
Servers Servers Servers
Storage Storage Storage
Networking Networking Networking

IaaS vs. PaaS vs. SaaS market share

Which approach of the three is the most popular? 

Stats show that SaaS has the biggest popularity. At least, a relevant study on cloud computing technologies shows that it has the biggest share of the cloud computing market. 

Its results look as follows: 

  • SaaS solutions – 39.4 % of the market;
  • IaaS – 20.9 % of the market;
  • PaaS – 18.7% of the market. 

What are the main reasons behind such a big gap, especially when it comes to PaaS vs. SaaS comparison? I think that there are a lot of them. To help you understand the situation better, I will describe the three models in more detail. 

IaaS (Infrastructure as a Service)

Now that you know the basic information on IaaS, let’s dive into this concept deeper. 

IaaS Delivery

So, as you may understand from its name, IaaS is about providing your customers with an infrastructure. 

Speaking in more detail, you, as a provider, deliver the entire cloud computing infrastructure. This includes servers, operating systems, and storage that work within the same network. 

Most of the other tasks, such as data, middleware, application features and design, etc. are the users’ responsibility. 

IaaS Advantages

The IaaS model brings you, as a software founder, the following benefits: 

  • Flexibility. It is valid for both you and your customer. All you should create is basic infrastructure. And you can deliver it the way you want it because the most specific customer requirements usually come at the features level. 
  • Less to handle. You deliver the infrastructure, while most other tasks are handled by the user. This means that the weight on your shoulders can be much less significant. 
  • Automated delivery. There are tried and trusted practices that allow you to deploy the most sophisticated IaaS product in the shortest terms. 

IaaS Disadvantages

Surely, IaaS has numerous significant disadvantages. These are: 

  • Technical challenge. IaaS is about developing one of the app’s lowest layers. Usually, you should be a software development expert to handle this task successfully.
  • Integration issues. Despite all flexibility, IaaS may fail to integrate properly with the user’s systems and tools they use to build an app. 
  • Time and budget. Delivering a quality IaaS is not an easy task. So you may expect it to take a lot of time and cost you a fortune. Especially if you don’t have too much software development experience. 

IaaS Examples

An overview of this cloud computing model would be incomplete without, at least, numerous examples. 

These are the ones I like the most. 

  • Digital Ocean. It is a rapidly developing cloud infrastructure provider. Digital Ocean is all about the aggressive and invasive promotion that helps these guys find completely different customers, ranging from individual developers to big enterprises. 
  • Google Compute Engine. It is a part of Google Cloud Services. With its Compute Engine, Google allows users to build their software on its cloud infrastructure. 

When to Develop IaaS?

So, it’s time to provide an answer to the main question of this chapter. 

Surely, it is not something definite, so perceive it as a mere piece of friendly advice. 

From my experience, developing an Infrastructure-as-a-Service platform is a great idea if: 

  • You have enough experience to build complex solution fundamentals;
  • Your target market includes big companies that need full control over their infrastructures. 

PaaS (Platform as a Service)

Let’s proceed with the same format for the PaaS overview. Here are the basic features of this model you should know before launching your cloud idea. 

PaaS Delivery

If you are a PaaS provider, the main thing you deliver to your customers is a cloud framework. 

The user can use this framework to launch his or her own cloud application. 

So, in brief, the customer’s responsibility is software creation. PaaS users can focus on it without worrying about operating systems, software updates, storage, and infrastructure. 

PaaS Advantages

Although PaaS is not the most popular cloud model, it still has numerous benefits that are especially relevant to software founders. These are:

  • Development with a ready foundation. The point is that IaaS may serve as a fundamental layer for your PaaS product. You may use the existing infrastructure and build more specific features on its basis.
  • Not too much to handle. Although PaaS is more specific than IaaS, you still leave most of the app and feature development tasks to the customer.
  • Less maintenance. Maintenance is also, basically, a customer’s responsibility. At least, you don’t need to handle updates, feature optimization, and similar basic things while providing a PaaS platform to your customers.

PaaS Disadvantages

But despite all these benefits, a PaaS model has drawbacks. The most significant ones are:

  • Solid tech expertise is needed. Just like with IaaS, one cannot simply take development tools and create a great Platform as a Service. To develop such a product, you need to have enough experience and skill. 
  • Integration issues. Be prepared that your customer’s organization will need to integrate your PaaS with their existing systems and technologies. And get prepared for challenges with integrations. Such issues are very familiar to PaaS founders. 
  • Relatively poor demand. Surely, PaaS platforms have their audience and you can easily communicate their advantages to some customers. However, the overall demand for Platform as a Service products remains low in comparison to IaaS and SaaS systems.
  • Security concerns. In the PaaS model, the provider handles the basic security concerns. Meanwhile, the client may implement one’s own security features to fortify the developed app. But, from my experience, it is always better when all security questions are handled by the same party.  
  • Time. There are many things you should handle while developing a PaaS product. So, in comparison with SaaS, PaaS development is a time-consuming process. If you want your product to reach the market as soon as possible, the Platform as a Service format is not your dream choice. 

PaaS Examples

Surely, no PaaS overview would be complete without solid examples. I will provide two that are especially relevant. 

  • AWS Elastic Beanstalk. This PaaS product works as an orchestration service for various AWS platforms and tools. In simple words, it allows you to use PaaS infrastructure and all that it provides to deploy brand-new applications. 
  • OpenShift Container Platform. Here’s a PaaS product that helps you use and orchestrate containers to deploy applications. In simple words, it provides a great range of cloud assets to customers who want to build brand-new apps. 

When to Develop PaaS?

So, consequently, when Platform as a Service is the right choice for software developers?

From my viewpoint, there are two cases:

  • When you have enough expertise to develop software fundamentals but feel inconvenient about your ability to deliver a great software infrastructure.
  • If you focus on customers who need app customization but don’t want to handle the basic software development aspects, such as the framework. 

SaaS (Software as a Service)

Now it’s time to tell you about my favorite cloud model. Surely, it goes about Software as a Service, a domain in which my team has exceptional expertise.

SaaS Delivery

In most cases, you handle all parts of Software as a Service delivery. 

These include data, middleware, servers, storage, and the very app with its features. 

De facto, you provide customers with ready-to-go software. 

Their task is to configure the features that you provide and to take maximum advantage of them. 

This area of responsibility is the main difference between IaaS, PaaS, and SaaS.

SaaS Advantages

SaaS is, by far, the most popular cloud deployment model. 

Surely, there are many notable advantages behind such popularity. So, the main benefits of launching a SaaS product for you as a software founder are:

  • Great demand. As has been already mentioned, SaaS is the most popular cloud model. This trend is hot, and the demand for SaaS platforms is high among business owners from different industries. 
  • Not so challenging to implement. Many SaaS solutions are far from challenging. You can develop them in relatively short terms and without overwhelming budget spending. 
  • A rich arsenal of SaaS development solutions. SaaS popularity means that there is a great range of tools for fast SaaS development. This brings development speed that has already been mentioned as a solid benefit. 
  • A big range of ideas. There are many SaaS ideas that will easily gain customer demand. You may check out my recent article on the best SaaS ideas that are quick and easy to implement for inspiration. 

SaaS Disadvantages

Despite its popularity and greatness, the SaaS cloud model still has some notable disadvantages. These are: 

  • Updates and maintenance are on you. It is one of the main features of the SaaS model. Customers will handle almost nothing. Meanwhile, all support, maintenance, and upgrades are your responsibility. 
  • Less flexibility. You should respond to the demands of your customers to keep your SaaS product competitive. So, your flexibility in Software as a Service development is limited. 

SaaS Examples

The list of successful SaaS examples may be truly impressive. I’ll mention just a few in this article. 

  • Adobe. Here’s one of the world’s most popular tools for design and visualization. Millions of users from all around the world subscribe to Adobe, both to handle complex visualization tasks or just to work with specific file formats.  
  • Slack. Here is a great CRM that helps teams organize workflows, share files, and communicate. Actually, my team uses Slack for internal communication as well. 
  • Figma. It is a very complex tool and every web designer’s helper. Before deploying websites, UI/UX design specialists create their layouts and visuals in Figma. The main things that stand behind its popularity are great functionality, interactivity, and collaboration features.
  • Mint. Here’s a personal budget SaaS platform. It helps ordinary users control their incomes and spending. By the way, you may check out my article on developing a Mint-like app

When to Develop SaaS?

And, as usual, here are possible situations where you should definitely choose SaaS among cloud model ideas. 

  1. You see a demand for a specific product or idea, but your budget is limited. 
  2. You don’t have too much expertise and find IaaS and PaaS development too challenging. 
  3. You want to deploy a cloud product in relatively short terms and within a reasonable budget. 
  4. You want to benefit from software development without diving into the most technically complex niches.

What Is the SaaS Option for Your Business Start?

So, as you may recognize from the previous chapters, SaaS has many benefits in comparison with IaaS and PaaS. Surely, there’s always a space for shifting perspectives. 

Or we may expand this overview and provide a SaaS vs. PaaS vs. IaaS vs. FaaS (Function as a Service) comparison. But, let’s be honest, in most cases, Software as a Service would be more than enough for software development startupers. 

For your technology startup, a SaaS option is: 

  • A perfect start that can be built without any significant software development expertise.
  • A solution that can be built on the basis of PaaS and IaaS as fundamental layers.
  • An opportunity to satisfy a B2B market demand immediately by building a solution in the shortest terms.

SoftFormance Is a Company that Helps you Get the Full Advantage of SaaS

And if you want to embrace all these benefits and develop a SaaS product that will help you thrive in the market, you need to find the right partner.

SoftFormance is ready to become such a partner for you. 

We are a team with more than 10 years of experience in software development and more than 200 successfully completed SaaS development projects. 

So, we definitely know how things should be done in this sphere.

Practical examples needed? 

Check out some SaaS development examples that illustrate our might and skill.

Revenue Compass

Here’s an analytical SaaS solution that allows users to keep track of their revenues and visualize their financial dynamics. 

Revenue Compass uses millions of rows of data about company sales to generate actionable reports and summarize it all for company analysts.

It provides custom graphs that make data visualization more accessible than ever to users. 


It is a CRM for solar panel agencies with a unique Roof Design Tool and proposal instrument.

My team supported this SaaS platform with the complex solar design planning and visualization mechanics. 
Therefore, LocalPower has become a very useful niche product. In my opinion, it is a perfect example of a really fresh SaaS startup idea.


One more example of a SaaS platform that deals with finances. 

Solvenzio allows companies to check the financial sustainability of their actual and financial partners or customers. 

This tool works on a subscription basis and employs complex analytical algorithms to give its users the most accurate finance credibility checks.


So, basically, all cloud development models are good, and all of them can bring you solid incomes.

The key point about IaaS vs. PaaS vs. SaaS comparison is that these are different platform types that fit completely different cases. 

To some extent, IaaS sets the foundation for PaaS, while PaaS sets the foundation for SaaS. 

And if you are not an extremely experienced software provider and you don’t have enough budget and time for complex development, the highest level seems to be a logical solution. 

So, to start with, give your customers SaaS. 

Moreover, you’ve already found a team that will handle all the technical stuff for you. 

So, your home task is to check out my article on SaaS ideas and come up with your own SaaS plans.

Don’t hesitate to share them in the comment section below. 

And contact us to start implementing them!


1. What is a SaaS and what are its benefits?

SaaS is a cloud model where you offer a customer a ready-to-go software product. It is usually provided on the subscription basis. The main SaaS advantages are great demand, a relatively simple implementation, an abundance of ready SaaS development solutions, and a big diversity of demanded SaaS ideas. 

2. What are successful SaaS examples?

Some of the world’s most popular software products are great SaaS examples. For instance, Adobe, Slack, Jira, Mint, Figma, Salesforce, and many more.

3. What are the key SaaS benefits in comparison to IaaS and Paas?

Although these concepts are very different, building a SaaS product may be the best idea for software founders that don’t have too much technical experience, need to develop a product at a limited time and budget, and want to satisfy the demands of a very broad B2B market. 

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