In the evolution of cloud computing, there are the concepts of Platform as a Service (PaaS), Software as a Service (SaaS), and Infrastructure as a Service (IaaS).
PaaS is the cloud computing service that provides a computing platform and a solution stack as a service. In PaaS, the cloud solution provider provides the operating systems, databases, web servers, development tools, and other services that are required to host the consumer's application. IaaS is at a level below the PaaS, as it provides the virtual (as well as physical) machines, servers, storage options, load balancers, networks, and more basic components. SaaS is at a higher level than PaaS, as it is the software distribution model in which the applications themselves are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. Here is an image that shows how Windows Azure supports IaaS and PaaS:
Depending on the cloud vendor, some of these...