Infrastructure as a Service
Amazon AWS is the largest of all the IaaS providers. Where SaaS offers a complete application as service and PaaS offers the ability to develop an application, IaaS doesn’t care about the application at all. IaaS provides the underlying hardware and operating system resources to do anything you want. IaaS has also been referred to as Everything as a Service.
IaaS offers CPU, memory, storage, networking and security as a package. IaaS is the virtual machine in the sky. In general, with IaaS, you choose from a range of operating systems (usually some flavor of open source), a size for your hardware (number of CPUs and CPU power) and an amount of storage.
There are a number of successful IaaS providers: Amazon, Joyent, GoGrid and FlexiScale. While Amazon is the best known of the providers, Joyent is also huge. Joyent hosts many Facebook applications and they host the social network LinkedIn, among others. In addition to proving that Amazon is not the only game in town, this also proves that real businesses (although without much of a business plan) are running in the cloud. It also shows that businesses with a need to scale are doing so.
The benefits of IaaS, in addition to the ability to scale, are the costs to get started and the ability to pay only for what you use. For a startup or small business, one of the most difficult things to do is keep capital expenditures under control. By moving your infrastructure to the cloud, you have the ability to scale as if you owned your own hardware and data center (which is not realistic with a traditional hosting provider) but you keep the upfront costs to a minimum.