Platform as a Service Business Model | PaaS Vs SaaS | PaaS Vs IaaS
Cloud Service Models
The cloud service model is a system that allows for the functional delivery of hosted services over the internet. The cloud can be accessed by any computer with an internet connection and does not require special software to access it.
Cloud computing is the delivery of computing as a service rather than a product. A cloud platform provides remote services to an end-user. The interfaces a user interacts with are typically a web-based graphical user interface or a programming interface. The cloud has changed the way we use technology.
It provides many benefits to users, including faster and cheaper hardware and cutting-edge software for a fraction of the cost. However, there are still some things that people need to figure out when it comes to utilizing these services properly.
The services are hosted on a remote location and are delivered to the user over the Internet.
There are three types of cloud platforms;
- Software as a Service.
- Platform as a Service.
- Infrastructure as a Service.
Platform as a Service (PaaS)
Platform as a Service (PaaS) is a cloud-based infrastructure that supports the development, deployment, and management of software and other services.
The benefits of PaaS include the ability to quickly scale and deploy code, as well as integration with third-party services.
In a platform as a service business model, a third-party company provides the development environment, operating system, and other platform resources to customers. In contrast, customers focus on the product or service that they need to create and/or deliver.
The benefits of this model are that it allows customers to leverage the knowledge and expertise of the third-party company to fulfill their needs without being encumbered by the on-demand development environment, operating system, and other costs associated with it.
For example, if you were developing a business application that needed to be hosted on a specific type of server, you would need to invest in this type of server before developing your business application. With third-party services, you would avoid this cost.
PaaS can be beneficial for businesses because it provides a way to build new apps without worrying about managing the infrastructure, and businesses can focus on their project’s business logic, not its infrastructure.
Components of the platform include storage infrastructure, networking components, and systems for authenticating and authorizing user access to the system. Platform adoption has been on the rise for years and has become an unavoidable part of many businesses. One of the most common ways that mobile devices are used is for email access.
Platform as a service, or PaaS, is becoming more popular for companies with projected growth in product offerings and limited engineering resources. The PaaS business model is a software-as-a-service (SaaS) model that offers a standardized, on-demand platform to build web applications.
Platform as a Service examples
What is a Platform as a Service example?
Some examples of PaaS offerings are Shopify, a platform for building and managing e-commerce stores, and Stripe, a mobile payments vendor.
Platform as a Service Revenue Model
The revenue model for the platform as a service model is subscription-based. This means that the end-user pays in advance for the use of the platform and uses it as long as they want.
Platform as a Service Customer Acquisition Cost
The customer acquisition cost (CAC) of a SaaS product or service depends on three factors, namely;
- The total number of customers that are trying to use the product or service
- The cost per customer
- The average revenue per customer (ARPA)
Platform as a Service Customer Retention Cost
The customer retention cost is defined as the cost of the customer in relation to the business value that they provide.
Platform as a Service Business Process
A platform, such as Amazon Web Services (AWS), hosts and manages multiple applications and services from different vendors. AWS is one of the most popular platforms for hosting and managing applications.
Benefits of Platform as a Service Business Model
Platform as a Service Key Benefits
The key benefits of the platform a service business model is;
- On-demand model
- Customizable functionality and web interface. Tailored application development for diverse business needs
- No upfront design cost and development time costs
- High scalability and elasticity
- Ability to build applications for new user demands, such as adding new functionality or platforms, without incurring steep upfront development costs or platform management fees.
- High availability
- High customization of services and features
- Ability to use multiple levels of services for different business needs
- Choice of operating systems
- Choice of programming languages
- Migration from other platforms
- Access to a wide range of available tools
- Rapid Application Development
Disadvantages of Platform as a Service Business Model
Platform as a service, or PaaS, is a type of cloud computing that offers software-as-a-service (SaaS) benefits in terms of scalability and ease of use.
However, it also has some disadvantages. For example, if you’re not careful about selecting the right provider, your data can be transferred out of your country’s jurisdiction and into another one with less stringent privacy laws.
Another drawback to this setup is that the customer is limited to the third-party company’s development environment, operating system, and other resources.
If the third-party company goes out of business, then your application will no longer work since it has been developed in a specific environment.
Also, if there is the software required for your application that isn’t supported by the third-party company’s development platform, then you won’t be able to use it.
With Paas, there may be unpredictable charges, especially as the service continues to grow.
PaaS Vs. SaaS
What is the difference between PaaS and SaaS?
The core difference between PaaS and SaaS is that, in the SaaS model, the business only has access to a fully functional application, whereas, in the PaaS model, they have both access to a fully functional application and the infrastructure.
PaaS (Platform as a Service) is a technology that helps developers build applications with tools for hosting, managing, and deploying software.
On the other hand, SaaS (Software as a Service) gives users access to self-contained applications without any need to install or maintain them on their own infrastructure.
Both technologies are very powerful in different ways but have some similarities too.
Unlike SaaS, PaaS often requires more expertise on the part of the customer to install and operate. PaaS also can cost much more than SaaS, depending on the type of application being created.
Companies have less power with SaaS because the vendor handles software, data, operating systems, storage, networking, and so on, but the cost is lower. SaaS is suitable for smaller businesses seeking to use cloud storage to cut costs and businesses in industries with fluctuating demand.
PaaS gives businesses control over their software and data while the vendor handles operating systems, middleware, runtime, and so on at a low cost. PaaS is suitable for businesses who want to build and manage their own applications without the complexity and complexities of networking, server administration, and coding from the ground up.
The difference between these two types of cloud computing is that a Platform as a Service (PaaS) will offer you the ability to build your own applications and then host them on their platform.
When you use SaaS, you are accessing an application that has already been built by someone else. When using PaaS, the developer will need to create everything from scratch, including designing it themselves – this includes all aspects such as management of data storage space, security protocols, etcetera.
SaaS Business Model Examples
- Oracle Application SaaS
- Google Apps for Business
PaaS Business Model Examples
- Amazon Web Services (AWS)
- Microsoft Azure
- IBM Bluemix
PaaS is essentially a pre-configured environment that an application is programmed to run in. The purpose of PaaS is to make it easy for the developer to implement common programming tasks such as deploying code or managing databases.
IaaS refers to pay-as-you-go storage, networking, and virtualization facilities. The physical infrastructure, which includes servers, storage, and other components, is typically provided and managed by the cloud computing provider.
The client, on the other hand, is in charge of almost all else, including the operating system, virtual machines (VMs) or containers, and any other software or middleware that might be used.
PaaS Vs. IaaS
What is the difference between PaaS and IaaS?
PaaS is a software platform that enables developers to build, test, and deploy applications without managing the underlying infrastructure.
IaaS is a type of cloud computing service that provides virtualized storage space as well as computational power.
PaaS and IaaS are two different types of cloud computing services. PaaS is a type of software that provides the necessary tools for developers to build, test, deploy, and manage their applications in a reliable platform.
Meanwhile, IaaS is an infrastructure service that offers raw compute power or storage capabilities to run any application on top.
Platform as a Service (PaaS) is a model that offers functionality for the following:
It’s a service that provides analytics, application functionality, and a developer interface for enterprise-type apps. Along with the platform, PaaS offers deployment automation to streamline the app’s deployment in less time than it takes to do so manually.
PaaS services are cost-effective for developing smaller apps or applications for small organizations and businesses that use their existing servers and software as is instead of buying dedicated hardware.
Infrastructure as a Service (IaaS) is a model that offers functionality for the following:
- Virtual Machines
IaaS gives you the ability to use specific hardware for a time period, and at regular intervals, an instance of IaaS is created for every new project. You can later decide the hardware you want to stay with – or you can upgrade the server depending on its performance. If you need more memory and speed, you can select an upgrade.
Developers that are using PaaS will get a better result compared to IaaS as they will be able to customize their applications.
Under IaaS, all your code is in one place with all of the documentation and source code in one place too. This offers you a strong foundation to build the application.
IaaS allows you to scale up your application and hardware instead of PaaS, which will decrease and increase storage and RAM every time an instance is created.
Why should you use PaaS over IaaS?
PaaS gives better results than IaaS because it is easier to start and control a project in PaaS compared to IaaS, which is relatively more complex.
Infrastructure as a Service is usually more suitable for larger organizations that have more complex applications and systems but not for small applications; in such circumstances, PaaS is more suitable.
PaaS is the better option if you want to host your own applications, whereas IaaS works perfectly for test environments. With PaaS, you can start small with just one application or a very specific technology, and then you can scale it up as your business grows.
With IaaS, all your code is in one place, with all of the documentation and source code in one place too.
PaaS is usually more suitable for developing smaller applications and business models because it is more scalable.
PaaS may require an upfront pay-as-you-go charge which can be worth it if you have already identified your app’s scalability and need to use the same app with a larger number of users, while IaaS does not require any such upfront fees.
PaaS is the better option if you want to host your own applications, whereas IaaS works perfectly for test environments.
With PaaS, you can start small with just one application or a very specific technology, and then you can scale it up as your business grows.
What are IaaS Examples
- Microsoft Azure: Microsoft Azure is a cloud-computing IaaS product that enables the development, testing, and management of applications through a network of Microsoft data centers.
- Amazon Web Services (AWS): Managed by Amazon, AWS is used for on-demand cloud storage and paid monthly. AWS assists businesses in storing data and delivering content — in fact, it is assisting you in reading this blog post right now.
- IBM Cloud: Another IaaS product that allows businesses to “allocate your device, network, storage, and security resources on demand.” In other words, companies only use resources when they are needed, resulting in increased productivity.
- Google Cloud: Google Cloud is an IaaS platform that allows companies to run Windows, Oracle, and SAP natively. A company can also manage its enterprise database and use AI technologies to improve its operational efficiency.