SAAS allows users to run online applications. Off-the-shelf applications are accessed over the Internet. The vendors own the applications and the users pay a fixed subscription fees. Great for generic applications, but not for customized, complex applications for large enterprises.
PAAS allows users to create their own cloud applications. Basically, provides an environment and set of tools to allow the creation of new web applications. More risk of vendor lock-in because applications cannot be moved easily between platforms.
IAAS allows users to run any applications they want to on cloud hardware of their choice. Existing applications can be run on the vendor’s cloud hardware, potentially replacing a company’s data center infrastructure.
