In IT, I guess we finally got tired of TLA’s (three letter acronyms) – so in the Cloud world, we are inventing FLA’s (four letter acronyms).
SAAS – Software as a Service is now pretty well known.
So let’s add to it –
PAAS – Platform as a Service (can be a whole range – User Interface, Workflow, Security, database, integration, messaging, queuing etc etc)
IAAS – Infrastructure as a Service (which basically means Servers, Storage and the Network)
It’s like a pyramid -
SAAS
PAAS and finally
IAAS
SAAS vendors use PAAS vendors, which use IAAS vendors. As you go higher in the stack, the profit margins tend to increase – meaning that IAAS companies have the least profit margins. This makes sense – since IAAS is about infrastructure = expensive, as compared to SAAS which is Services / Software – and that is cheap.
A recent study has shown IAAS to be a $4 billion market by 2012, PAAS to be $9 billion and SAAS to be a 21 billion. This means, cloud computing totally would be a market of $34 billion by 2012.
