Infrastructure as a Service (IaaS) provides users the capability to provision processing, storage, and network resources on demand. The customers deploy and run their own applications on these resources. Using this service model is closest to the traditional in-premise models and the virtual server provisioning models (typically offered by data center outsourcers). The onus of administering these resources rests largely with the customer.

In Platform as a Service(PaaS), the service provider makes certain core components, such as databases, queues, workflow engines, e-mails, and so on, which are available as services to the customer. The customer then leverages these components for building their own applications. The service provider ensures high service levels, and is responsible for scalability, high-availability, and so on for these components. This allows customers to focus a lot more on their application's functionality. However, this model also leads to application-level dependency on the providers' services.

In the Software as a Service(SaaS) model, typically, third-party providers using a subscription model provide end-user applications to their customers. The customers might have some administrative capability at the application level, for example, to create and manage their users. Such applications also provide some degree of customizability, for example, the customers can use their own corporate logos, colors, and many more. Applications that have a very wide user base most often operate in a self-service mode. In contrast, the provider provisions the application for the customer for more specialized applications. The provider also hands over certain application administrative tasks to the customer's application administrator (in most cases, this is limited to creating new users, managing passwords, and so on through well-defined application interfaces).