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Well I hope you got the pun from the title as its my best attempt at being creative. The data center hosting business has over a short period of time become very confusing for most people. I thought I would make an attempt to simplify this topics for everyone. First of all a simple definition of what these terms are (of course minus the last one which is a joke) and then my take on each.

SaaS -- Software as a service is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or upload the application to the consumer device, disabling it after use or after the on-demand contract expires.

Think of this as the traditional ASP model from the Dot-Com boom. This is merely the act of offering a software solution such over the internet and charging fees for users per month (eg. salesforce.com).

PaaS -- Platform as a service is a runtime-system and application framework that presents itself as an execution environment and computing platform available over the Internet with the sole purpose of acting as a host to application software.

Think of this as the actual application framework that would run a SaaS platform that provides the technology stack (eg. Google AppEngine).

IaaS -- Infrastructure as a service is the delivery of computer infrastructure (typically a platform virtualization environment) as a service. The big push of virtualization technologies such as Xen, VMware, Hyper-V, KVM and others have really helped this category flourish.

Think of this at its most basic element of providing the actual physical (however in this case its virtual) resources like RAM, CPU, storage to run the application and platform (Amazon's EC2/S3, Rackspace Cloud, Terremark Vcloud, etc).

Now how do all these things fit together (or do they)? First these can all be used independently or together. For instance we have salesforce.com here at StrongMail to help run sales and support. We also use The Rackspace Cloud to fulfill the infrastructure for our Cloud offering. They are mutually exclusive to each other. These can however be used together and here is a simple diagram on how they interact and who would be interested in each layer. I hope this has been helpful.

Thanks to saasblogs.com for the picture.