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IAAS

Infrastructure-as-a-Service. When we think of infrastructure, the mind jumps to the concept of hardware. However, a typical resource that is leased with the IAAS model is a virual server, which is a virtualized image of a physical server created by virtualization software. There can be multiple virtual server running at the same time in a virtualization environment installed on a single physical server. Different virtual servers (or virtual machines) serve different users that are isolted from one another, enabling mutli-tenancy. 

A virtual server can be controlled and administered remotely by a cloud consumer similarly to their physical servers. Cloud consumer can choose what operating system to run on the virtual server, what tools and applications to install and so on.

IAAS is usually the most expensive among the cloud delivery models, but gives the cloud consumer the highest level of administrative control. 

Example: Amazon Web Services E2 (AWS), Go-Grid, ...

PAAS

Platform-as-a-Service. Provides a ready-made environment that comes with a set of pre-packaged products and tools (for instance: application servers like WebLogic, JBoss and Tomcat or DBMS like Oracle and MySQL).

A cloud consumer doesn't have to worry about other components such as software upgrades, patches and licensing.

A cloud consumer might lease a PAAS environment to expand or replace its main environment.

For instance: Puppet  is a declarative language that allow to a developer to write a cloud PAAS recipe.

PAAS examples: Google App Engine, Salesforce's, Microsoft Azure, VMware Cloud Foundry

SAAS

Software-as-a-Service. Represent a software product that is available to clouc consumers remotely with minimal up-front effort. It is software where the users don't have to download it or install it on their computer, they just utilize it remotely through a web browser or another sort of thin client.

Example: Google Docs, Microsoft Office 365