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Updated Jun 26, 2024

What Is IaaS?

IaaS, or infrastructure as a service, is a cloud computing model that provides access to computer hardware in a cloud-based environment. Learn how to use it in your business.

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Written By: Adam UzialkoBusiness Strategy Insider and Senior Editor
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Infrastructure as a service (IaaS) enables companies to effectively rent a computerized infrastructure from a remote location, thus supporting their business’s technological needs without an extensive investment. Such products include virtual servers, network connections and load balancers.

As businesses become more technologically advanced, many are adopting an IaaS model for their infrastructure. While it can be a daunting task to outsource these needs, setting up your company with the IaaS model can reduce costs and increase flexibility.

What is IaaS?

Infrastructure as a service, commonly referred to as IaaS, is a cloud computing model that provides access to computer hardware in a cloud-based environment. The main appeal of any cloud computing service is the virtualized hardware and software. The hardware resources in IaaS are pulled from multiple servers and networks located across multiple offsite data centers and are maintained independently of your company. You simply pay a monthly fee to use these resources as needed internally, and the cloud host is responsible for the ongoing care of the hardware and virtualized services.

IaaS vs. PaaS vs. SaaS

IaaS, PaaS and SaaS are the three main models of cloud computing services.

  • IaaS provides services for creating an effective business infrastructure in the form of server and network resources, allowing for the availability of a private cloud and virtualized local network.
  • PaaS, or platform as a service, caters to software developers, providing a platform and environments in which they can build applications and similar services over the internet.
  • SaaS, or software as a service, offers a combination of IaaS and PaaS, granting access to a software application over the internet. 

Each of these solutions caters to a different type of user and whether they need hardware or software resources for specific tasks.

IaaS

PaaS

SaaS

Used primarily by business owners and cloud service providers

Used primarily by developers and IT teams

Used primarily by employees and consumers

Provides server and network resources for businesses to run their own private cloud and local networks

Provides resources for developers to build their own applications and other services 

Provides access to  internet-based software applications

Offers you the most control over your infrastructure

Offers you less control over your infrastructure

Offers you less control over your infrastructure

Customization capabilities are somewhat limited 

Customization capabilities are somewhat limited 

Customization capabilities are very limited

May be difficult to switch to a new vendor after sign-up

May be difficult to switch to a new vendor after sign-up

May be difficult to switch to a new vendor after sign-up

FYIDid you know
Some businesses use a combination of IaaS, PaaS and SaaS, depending on their specific needs.

How businesses can use IaaS

Wondering if your organization needs IaaS? Here are some of the reasons businesses use infrastructure as a service:

  • Analyzing large amounts of data: IaaS has the processing power necessary for analyzing and storing lots of data.
  • Scaling for increased traffic: For growing businesses, IaaS is well-equipped to handle sudden surges in website visitors.
  • Launching new projects quickly: If you need to begin a project urgently, IaaS can help you get it off the ground almost immediately.
  • Improving recovery processes: Backing up your data can get a whole lot easier, as IaaS provides a reliable way to unify your recovery systems. 

IaaS caters to the same consumer mentality as PaaS and SaaS in that you can use these services as cost-effective and easily scalable methods of creating IT solutions. The complexities and expenses associated with IT infrastructure are considerable, but they are easily overcome through a cloud provider. For example, if your business needs to grow quickly with operational fluctuations, you can tap into cloud resources as needed rather than purchasing, installing and integrating new hardware internally. [Read related article: Small Business Guide to Cloud Computing]

IaaS offers these capabilities:

  • Enterprise-level infrastructure: IaaS establishes an internal business network in the form of a private cloud and virtual local networks, utilizing a pooled server to store company data and run the needed applications each day. This basic structure allows for easy business expansion while providing necessary data protection in a cloud setting.
  • Cloud hosting: Rather than storing hardware within your business facilities, you can host your websites and virtual servers through a pooled collection of physical servers elsewhere. This provides the huge benefits of security redundancies and on-demand scalability.
  • Virtual data centers: A virtualized network of interconnected servers enhances your business’s hosting capabilities, thereby creating an ideal environment for a public or private cloud.

Benefits of IaaS

The infrastructure you create through IaaS can significantly cut down on business expenses and your personnel requirements in various ways, thanks to these benefits:

  • Scalability: When a business experiences significant growth, it typically needs to purchase, install and implement new equipment, as well as train employees on how to use it. IaaS cuts out the first two steps, providing immediately available resources for easy growth.
  • No hardware investment: Computer hardware makes up much of the expense associated with a comprehensive IT solution. When you invest in a cloud hosting solution, you remove the risk of hardware failure and the need for ongoing maintenance.
  • Utility-style pricing: With IaaS, you pay only for the resources you actually use, saving your business money over the long term.
  • Independent location: In the event of a power outage at your place of business, relying on in-house servers can become quite problematic, as they’d be suddenly unavailable to any consumers who use them. Housing your server resources in an independent location ensures your servers’ continued operation.
  • Hardware security: Services available through cloud hosts have secure data centers with multiple physical security measures.
  • No single point of failure: Thanks to the redundant nature of cloud hosts, if one server or network switch were to fail, the data center would be unaffected. It would naturally reroute activity through its numerous hardware resources. Even if an entire data center failed, the host would have secondary and tertiary centers to ensure continued online function.
Did You Know?Did you know
When you need to store and access massive amounts of company data, cloud data services like IaaS are a cost-effective alternative to data centers. Learn the differences between cloud storage and traditional data center storage.

Drawbacks of IaaS

While IaaS offers several advantages for businesses, it does have some faults. Here are some of the disadvantages of IaaS: 

  • Responsibility: IaaS may be great for backing up data, but the responsibility of keeping everything secure falls on your business.
  • Additional costs: You may have to pay additional fees if usage increases in a particular month.
  • Integration challenges: IaaS isn’t always easy to integrate with your existing systems, which means you may need to redesign your current processes and workflows.
  • Extra maintenance: It’s great that IaaS instances can be created so quickly, but it’s easy to forget to take them down, which could result in excess inventory.
  • Less customer support: With greater control comes greater responsibility on your part. It can be difficult to get robust customer service from an IaaS provider. 

Decide if IaaS is right for your business

If you want the benefits of extensive technological infrastructure without investing in tons of new hardware, IaaS could be the solution your business needs. Do your research to make sure your team can handle the internal management responsibilities and potential extra costs. IaaS does have some limitations, but with upsides such as increased scalability and hardware security, the pros generally outweigh the cons. 

Natalie Hamingson and David Cotriss contributed to this article.

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Written By: Adam UzialkoBusiness Strategy Insider and Senior Editor
Adam Uzialko, senior editor of Business News Daily, is not just a professional writer and editor — he’s also an entrepreneur who knows firsthand what it’s like building a business from scratch. His experience as co-founder and managing editor of a digital marketing company imbues his work at Business News Daily with a perspective grounded in the realities of running a small business. At Business News Daily, Adam covers the ins and outs of business technology, such as iPhone credit card processing, POS systems, CRMs and remote-work tools, while also sharing best practices for everyday operations. Since 2015, Adam has also reviewed hundreds of small business products and services, including contact center solutions, email marketing software and text message marketing software. Adam uses the products, interviews users and talks directly to the companies that make the products and services he evaluates. Additionally, he often specializes in digital marketing topics, with a focus on content marketing, editorial strategy and managing a marketing team.
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