IaaS vs. PaaS: How Can Businesses Choose the Best Model?

Sudeep Srivastava December 1, 2022

In 2021, 36% of enterprises across the globe spent more than $12 million towards cloud adoption. In such a situation where businesses are looking to do more through the cloud services than simply shift the software burden, the gap between IaaS and PaaS is slowly getting blurred. 

The cloud markets are undoubtedly diversifying under the cloud backbone (which are increasingly being made reliable). Now, it has come on the organizations to choose the best cloud model for their business needs. In order to do that, it is crucial that they understand what separates the most commonly used cloud approaches.

In this article, we are going to look into the key differences between IaaS and PaaS. It will be a difference of $44.44 billion IaaS market vs $101 billion PaaS sector

Now although, at the beginning of the article we said that the lines between IaaS and PaaS are getting increasingly blurred, they are far behind from getting merged. Today, we will look at the pointers of IaaS vs. PaaS that businesses should understand.

Comparing CAGRs of PaaS and IaaS, 2018-2022

What is IaaS? 

IaaS or Infrastructure-as-a-Service is a type of cloud computing which offers virtualized computing resources to the consumers through the internet on an on-demand or pay-as-you-go basis. These virtualized resources consist of key computing, networking, and storage resources.

The IaaS cloud model helps the stakeholders gain real-time business information without the high maintenance cost of on-premises hardware and data centers. Moreover, it gives them the flexibility of scaling IT resources up or down as required. 

Now while this answers what is IaaS in cloud computing, it is important to understand the key characteristics of the model.

Iaas market size

The key characteristics of IaaS includes:

Service-based resources — The compute resources are offered on demand through a service-based model.

Easy scalability — With infrastructure being deployed across a range of data centers sizes worldwide, businesses can easily scale their resources up or down as required.

Usage-based costs — Businesses tend to pay for what they utilize. 

Benefits of IaaS

Some of the major benefits of adopting the IaaS cloud model lie in infrastructure scalability, cost and time savings, and flexibility.


As the business size changes, so do the IT infrastructure requirements. The IaaS cloud model enables you to scale the infrastructure up or down according to the business’s real time requirements. Know how you can build a core IT modernization strategy for your business.

Cost & time savings 

In IaaS, you have to pay as you go for the resources that you require. The IT team doesn’t have to dedicate their time in maintaining the physical infrastructure. For companies, this results in big-time cost and time savings.


With IaaS, you get complete control of your infrastructure. By logging in via API, the IT team can oversee servers and storage and then configure them to meet your business objective.

Limitations of IaaS

Many restrictions linked with PaaS models – such as data security, vendor lock-in and operational issues – apply to the IaaS cloud model as well. The limitations specific to IaaS can include:

Data security 

While the customers have complete control on their data, apps, and middleware, the security threats can come in from the virtual machines or the host. Any inside loophole in system check can expose the data communication between the virtual machine (VM) and host infrastructure to the unauthorized entities.

Legacy systems in the cloud

While enterprises can run their legacy systems on the cloud, the standard infrastructure might not always be designed to meet the specificities of the legacy apps. Basic enhancement in the legacy app might be needed before they are migrated to the cloud, creating the need to test performance and security of the IaaS systems.

Internal resources’ training

When applying the IaaS model, it becomes imperative for the internal development team to learn how to manage the infrastructure. This learning should be provided in order to make business the owners of data security, backup, and their business continuity. 

Multi-tenant security

Because the hardware resources are allocated dynamically across different enterprises, the vendor is required to ensure that other businesses are not able to access the data deposited in storage assets by others. Likewise, the enterprises should also rely on vendors to ensure that the VMs are isolated. 

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Infrastructure as a Service Examples

Popular examples of IaaS include:

  • Microsoft Azure
  • AWS – Amazon Web Services
  • Digital Ocean
  • Google Cloud
  • IBM Cloud
  • Alibaba Cloud

Also Read: AWS Vs Azure Vs Google Cloud – Which cloud platform should you choose for your enterprise?

What is PaaS? 

PaaS or Platform-as-a-Service is a type of cloud computing which offers users an end-to-end cloud-dependent platform for creating, running, and managing the applications. These services are usually associated with building, maintaining, and packaging software bundles. 

In the PaaS cloud model, third-party providers deliver hardware, software, and infrastructure to the users through the internet. 

The users can buy the resources as they require from the service providers on a pay-as-you-go model, by accessing them over a secure network. The users typically manage the services and applications which they develop, while the cloud service providers manage everything else.

Now while this answers what is PaaS in cloud computing, it is important to understand the key characteristics of the model.

Paas market size

The key characteristics of PaaS includes: 

Integration — By integrating with key databases and web services, the PaaS cloud model lowers the time it takes for developers to look for key components and resources.

Customization — The PaaS apps, through built-in testing, development, and deployment tools, can be easily customized to answer the business needs in a time sensitive manner. 

Collaboration — It provides a unified development platform which enables multiple users to collaborate on a single application project. 

Benefits of PaaS

Some major benefits of PaaS cloud adoption lie in the software development speed, customization, and flexibility.


Developers can go right to the coding part in place of spending time in setting up and maintaining the system and servers for development. This approach expedites the complete development and deployment process greatly. 


PaaS allows you to create, test, and deploy your custom apps and scale the development resources up or down as the business requires. 


You can migrate your app from cloud to hybrid or on-premise, integrate your app with web-based resources and database and assign multiple developers to a single project. 

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Limitations of PaaS

The limitations of PaaS systems range majorly around integration, operational restrictions – 

Security of the data

While enterprises can run their services and apps on the PaaS solutions, the data residing on vendor-controlled cloud servers, however, poses a lot of security concerns. As a business, your security options get limited as you might not be able to deploy services in accordance to the specific hosting policies. 

Vendor lock-in 

The technical and business decisions which took an enterprise towards PaaS, might not even be applicable in the future. If the vendor has provisioned some expensive or complex migration policies, it might get difficult to switch to an alternate PaaS option.

Customization of the legacy systems

PaaS solutions, more often than not, are not built as a plug-and-play solution for the legacy services and apps. Instead, there has to be multiple customizations made in the legacy systems for it to work with PaaS. The merger of both the solutions can lead to the creation of a system that lowers the returns on PaaS investments completely. 

Operational limitations

The customization of cloud operations with the management automation workflows is difficult in PaaS solutions, since the platform limits the operational abilities for the end users. 

Although the reason this happens is to lower the operational burden on the end users, this loss of operational control affects how the PaaS solutions are handled and operated.

Platform as a Service Examples

Popular examples of PaaS include:

  • Elastic Beanstalk from AWS
  • Heroku
  • Open Shift from RedHat
  • Engine Yard

What is the Difference Between IaaS and PaaS? 


The biggest difference in IaaS vs. PaaS lies in the services that both the models offer. An IaaS provider provides a virtual data center for storing company information and creating platforms for application and service development, testing, and deployment. 

PaaS providers, on the other hand, provide a virtual platform and the set of tools to build, test, and then deploy services and applications.

End-User Management

IaaS enables the end users to manage the applications, the platforms which are used to develop them, and the cloud-based resources that keep everything running, like the middleware, operating system, data, applications, and runtime environment. 

PaaS enables the end users to manage apps that they develop via the tools offered by the cloud platform.

End User Security Responsibilities

The IaaS users are responsible for safeguarding user access, data, apps, virtual network traffic, and operating systems. 

While, the PaaS users are meant to secure their data, user access, and apps. 

Vendor Security Responsibilities

In IaaS vs. PaaS providers responsibilities, the IaaS vendors are the owners for ensuring safe access control to IT systems, physical facilities, and the cloud services. 

On the other hand, PaaS vendors hold the onus of securing the physical infrastructure and operating system.

Flexibility and Cost

The last key difference between IaaS and PaaS is that the former is very flexible, but it’s also the most expensive type of cloud computing. 

On the other side, PaaS is also flexible but with some limitations, and is mid-tier in cost.

When to Use Which Cloud Model?

Cloud Models 

When to use IaaS: 

  • You want to have control. With IaaS, the providers manage storage and servers, but your IT team ensures that everything is running on an infrastructure.
  • Your company is growing. Through IaaS, you can make modifications according to your needs or on the basis of traffic spikes. 
  • You want to increase reliability, security, stability, and support. With IaaS, there is no dependency on maintaining or upgrading the hardware or troubleshooting the equipment problems.

When to use PaaS:

  • You have to build software, and you have the resources. If you don’t want to build networks, servers, and manage the databases, PaaS will provide you with virtual platforms and tools for creating, testing, and deploying the service or applications.
  • Multiple remote developers are working on one project. PaaS provides you an amazing environment, flexibility, and speed for the entire process, irrespective of where the developers are based out of.
  • You are rapidly developing an application. PaaS helps with lowering the costs and simplifying the challenges linked with quick shipping of an application.

The difference between IaaS and PaaS as you saw, varies greatly from one business need to another. As an entrepreneur, the choice between the both would be a matter of priorities between those business goals. Know how you can choose a cloud computing model for banking business.

We hope that you got all the information you would need to make a sound decision when it comes to choosing the best cloud model for your business.

If you need more clarity on which cloud model to choose and how it will impact your business, reach out to our cloud specialists.

Sudeep Srivastava
Co-Founder and Director
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