SaaS Agreements – SaaS, PaaS, IaaS – Is There a Difference?

Cloud computing services comprise of – Platform as a Service (PaaS), Infrastructure as a Service (IaaS) and Software as a Service (SaaS). These terms are commonly used to describe the different levels and combinations of services which are together commonly referred to as “cloud computing”.

SaaS – Software as a Service

Sometimes referred to as “software on-demand”, SaaS is a software delivery model in which software and data are hosted centrally and accessed using a web browser via the Internet.

Examples of common SaaS applications are:

  • email accounts such as Hotmail or Google;
  • CRM (customer relationship management) systems such as Salesforce;
  • HCM (human capital management or talent management) systems.

Important features of SaaS are that:

  • customer data can be added to the software application;
  • the software application can be accessed without the need to use additional hardware or software;
  • data and the software application are hosted centrally.

PaaS – Platform as a Service

PaaS provides developers with a platform to write and create their own SaaS application.  PaaS provides developers with the necessary tools to create, test, host and maintain the applications they have created. This alleviates the need for developers to buy and maintain the underlying hardware, software and hosting facilities for their SaaS applications.

The most well known PaaS is Facebook.

Within the classic layered structure of cloud computing PaaS forms the middle layer sitting between between SaaS at the top and IaaS at the bottom.

Important features of PaaS are:

  • application hosting, development, testing and deployment environment;
  • other integrated services such as database integration, security and storage.

IaaS – Infrastructure as a Service

Sometimes referred to as “hardware as a service”, IaaS is an outsourcing model under which users rent equipment accessed via the Internet to support their operations.

One of the most well known forms of IaaS is, which provides the computing power behind many major online services, for example Foursquare.

The IaaS supplier owns all equipment and is responsible for housing, running and maintaining the equipment. The user simply pays a usage rental fee for accessing the outsourced services via the Internet.


SaaS is a software distribution model in which a third party hosts and makes software applications available to end users via the Internet. PaaS is a framework for delivering operating systems and associated services via the Internet, which does not involve any software downloads or installation. IaaS is a form of equipment outsourcing via the Internet used to support a company’s operations.


Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:

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