Cloud-based services and platforms play a critical role in driving digital transformation in nearly all aspects of running a business.
According to a report by Oracle and Longitude Research, 67% of executives in 2020 agreed that their cloud capabilities enabled their organisations to maintain a competitive advantage. What’s more, over half of the business leaders who joined the survey said they had already migrated their mission-critical workloads and applications to cloud environments.
If you’re like the many small businesses seriously considering migrating their applications, data storage and workloads to the cloud, you may have already run into three types of cloud service models: SaaS, IaaS, and PaaS.
Here’s a quick explainer of what each model means.
3 Types of Cloud Service Models Explained
Cloud computing is a broad term that encompasses software, storage and computer processing power. These functions are typically sold as different service models, each one varying in scope, complexity and (you guessed it) cost.
1. SaaS — Software-as-a-Service
In the SaaS model, your organisation uses software hosted by a cloud service provider that’s paid for on a subscription basis — often monthly or annually.
This type of cloud service is arguably the most popular and accessible model, with applications running the gamut from project management platforms like Asana and Basecamp to collaboration tools like Google Docs and Microsoft Teams.
For small businesses, the SaaS model represents the fastest and cheapest way to transfer workloads to the cloud — mainly because these platforms can scale as the business grows. For example, if you’re a small company of 10 people, you can start with a “standard” cloud storage plan and move up to an “advanced” or “enterprise” plan as your workforce and customer base grow.
2. IaaS — Infrastructure-as-a-Service
The IaaS model is ideal for businesses that need more computing power and advanced networking and storage capabilities.
For example, let’s say you want to migrate your workloads to the cloud using a rehosting migration. This involves lifting a copy of your entire IT infrastructure to the cloud — a complex undertaking that will typically require an IaaS migration.
It helps to think of this model as paying rent for off-site hardware, server hosting, and storage every month. A textbook example of an IaaS model can be seen in cloud service providers like Amazon’s AWS and Microsoft Azure.
3. PaaS — Platform-as-a-Service
Finally, the PaaS model allows you to develop applications without having to purchase the infrastructure yourself. A PaaS provider also handles the back-end of these platforms, which removes the need to hire IT professionals to manage your applications. With this model, you can focus your attention on design and user experience instead.
The PaaS model offers businesses the tools and pipeline to create application programming interfaces (APIs) — interfaces that allow different pieces of software to interact and work with each other.
For example, the ability to pay for your purchases online with a service like Stripe happens through an API. Think of APIs as a wholesale market for building a web presence — they allow other companies to integrate your data and resources into their sites and applications, and vice versa.
API integration is fast becoming a revenue driver. In 2019 alone, 55% of businesses used API integration as a revenue stream.
Which Cloud Service Model Should You Choose?
This will sound like a cop-out, but the answer to this question is: it depends.
Each cloud service model is designed to accommodate different types of business needs. The key is to determine why you want to migrate to the cloud, what processes, applications and data needs to be migrated and how much you’re willing to pay for the endeavour.
Once you understand your needs, you’ll have an easier time choosing the service model that works best for you.
