Every cloud service you pay for fits one of three models. Each one decides what the provider looks after, and what you still own.
Key Takeaways
- IaaS rents servers and storage; you run the rest.
- PaaS adds the operating system and runtime; you manage apps and data.
- SaaS is finished software like Microsoft 365; you manage users and data.
- SaaS is Australia’s largest cloud spend: almost A$16.4 billion in 2026 (Gartner).
What IaaS, PaaS and SaaS actually mean
The three cloud service models are formally set out in NIST’s definition of cloud computing (2011). Think of one stack: the higher you go, the more the provider runs.
| Model | What you rent | You manage | Examples |
|---|---|---|---|
| IaaS | Servers, storage, networking | Operating system, apps, data | Azure VMs, AWS EC2 |
| PaaS | A platform to build and run apps | Your code and data | Azure App Service, Google App Engine |
| SaaS | Finished software | Users, settings, data | Microsoft 365, Xero, Salesforce |
| IaaS, PaaS and SaaS differ in how much of the technology stack the provider runs. IaaS hands over hardware, PaaS adds the operating system and runtime, and SaaS delivers finished software. In every model, your data and user access stay your responsibility. |
Where Australian businesses are spending
Gartner’s 2026 Australian cloud forecast puts public cloud spending above A$33.6 billion this year, up 17.9% on 2025. SaaS remains the largest category at almost A$16.4 billion, while IaaS is growing fastest at 24.1%, followed by PaaS at 20.9%.
Most small businesses start with SaaS, usually Microsoft 365 support and licensing. IaaS appears when an old server moves to the cloud.
Security is shared, not handed over
The Australian Signals Directorate released ASD’s Essentials for cloud guidance on 15 October 2026 for organisations running on SaaS and PaaS. Its message: security is shared, so know which controls stay with you.
Microsoft won’t stop staff approving a fake sign-in. That’s why we pair Microsoft 365 with independent data backup and recovery and controls mapped to the Essential Eight maturity model.
| Moving to the cloud doesn’t move your accountability. The provider secures its infrastructure, while identity, access, configuration and data protection stay with you. A business running only on SaaS still needs multi-factor authentication, tight admin rights and backups held outside the platform. |
Which model suits your business?
Most businesses use all three. Gartner’s forecast shows IaaS and PaaS outgrowing SaaS in 2026, as AI workloads push demand. The rule: buy SaaS where it exists, and our IT consulting team can map the rest.
- SaaS: email, accounting, CRM and practice software.
- PaaS: custom apps your developers maintain.
- IaaS: legacy software that needs its own server.
Frequently asked questions
Microsoft 365 is SaaS. Microsoft runs the servers, software and updates, while you manage users, licences, security settings and data. Azure, Microsoft’s separate platform, provides IaaS and PaaS.
PaaS is a ready-made environment for building your own software; the provider handles servers, operating systems and databases. SaaS is software someone else has already built, ready to use in a browser.
Not automatically. SaaS removes server patching, but weak passwords, missing multi-factor authentication and over-shared files remain your risk. IaaS gives more control and more to configure.
Get the right cloud model from the start
Tecnic Group helps Perth businesses choose and secure the right cloud mix. Explore our cloud IT services and managed IT services, or book a free consultation.
