Cloud computing models vary: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Manage your cloud computing service level via the surrounding management layer.
Infrastructure as a Service (IaaS). The IaaS layer offers storage and compute resources that developers and IT organizations can use to deliver business solutions.
Platform as a Service (PaaS). The PaaS layer offers black-box services with which developers can build applications on top of the compute infrastructure. This might include developer tools that are offered as a service to build services, or data access and database services, or billing services.
Software as a Service (SaaS). In the SaaS layer, the service provider hosts the software so you don’t need to install it, manage it, or buy hardware for it. All you have to do is connect and use it. SaaS Examples include customer relationship management as a service.
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Source:http://www.dummies.com/how-to/content/cloud-computing-models.html
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