They are three different levels at which one can look at a cloud:

• Infrastructure as a Service (IaaS)
  Here the computing capabilities provided to the consumer are processing, storage, networks and other fundamental computing resources, on which the consumer can deploy and run arbitrary software. The consumer controls the resources and software, like operating systems and applications. Note that these are most likely virtualized resources.
• Platform as a Service (PaaS)
  Here the computing capability provided to the consumer is a platform of programming languages and tools that allow the consumer to create and deploy applications on the provider’s infrastructure. The consumer controls the deployed applications and their configurations, but not the operating system.
• Software as a Service (SaaS)
  Here the computing capability provided to the consumer is an application that runs on the provider’s infrastructure. The consumer controls only user specific application settings.

Let’s just agree that this is how we describe cloud to our moms: SaaS is Crate and Barrel, PaaS is IKEA, and IaaS is Home Depot.

Aaron Levie