SaaS, PaaS, and IaaS

Cloud computing means computing capability delivered as a utility through Internet standards and protocols. The computers are offsite (not within your enterprise) and managed by a third party, known as a cloud service provider.

SaaS stands for "software as a service", a business model where applications used by your enterprise are hosted in a cloud by a cloud service provider. This typically refers to a specialized application offered on a subscription (pay-as-you-go) basis. In this model, the application provider typically managed all license requirements, which from the subscriber's perspective are bundled in the subscription costs.

PaaS stands for "platform as a service", which offers hosted application servers with potentially massive scalability, together with the necessary supporting services like storage, security, integration infrastructure and development tools for a complete platform. PaaS is most often suited to new/custom application development, where applications can be annotated with resource descriptors that identify required network endpoints, load balancers, CPU cores, memory, software dependencies, and the like. In this model, it is quite common for the subscriber (your enterprise) to be responsible for any required software licenses.

IaaS stands for "infrastructure as a service", which is similar to traditional hosting. You use the hosted environment as a logical extension of your on-premises datacenter, and typically have full control of the software configuration on the hosted devices. In IaaS, you are almost always responsible for the required licenses to cover the applications you configure.

The practice where the cloud service provider relies on your enterprise to ensure adequate licensing of the applications in use within the cloud service is often called "bring your own software license" (BYOSL).

For more information about support for BYOSL within IT Asset Management, see BYOSL for IaaS/PaaS.

The following diagram by Microsoft shows the varying divisions of responsibility between the cloud service provider and your enterprise as the subscriber to the various kinds of service.

IT Asset Management (Cloud)