Before cloud there was on-premise. Essentially, this is ‘packaged software’, which means that the consumer has to manage the whole infrastructure that runs on the premises of the organization. It includes applications, data, runtime, middleware, operating system, virtualization, servers, storage, and networking. Cloud on the other hand gives access to services through the internet.
The service level varies depending on what is managed by the cloud provider:
Software as a Service (SaaS)
SaaS means that full management is being provided by the cloud provider. Cloud users consume benefits of the applications without dealing with the infrastructure behind. It is the norm in B2C offerings as we all use software such as Office 365 without worrying about underlying IT infrastructure. Prime B2B example would be Salesforce who disrupted the enterprise software industry with their pure SaaS approach.
Platform as a Service (PaaS)
Pre-defined and ready for use environments are what make up a PaaS offering. Resources are already deployed and configured. There is no need to set up and sustain the back-end infrastructure, which also means less control. Enterprise software companies might also deliver their customers a Platform as a Service, which can be seen as an application development framework.
Infrastructure as a Service (IaaS)
As the name suggests infrastructure is provided as a service, which means there is a shared cloud ownership between the cloud provider and cloud consumer. A cloud infrastructure provider such as Amazon Web Services (AWS) provides the infrastructure on which an enterprise software company like Infor runs its operating system and ultimately its applications. The end-user enjoys the applications in a SaaS offering.