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Windows Azure and SaaS, PaaS and IaaS

Software as a Services (Saas):

SaaS is a method of software delivery that allows data to be accessed from any device with an Internet connection and web browser. In this web-based model, software vendors host and maintain the servers, databases and code that constitute an application. This is a significant departure from the on-premise software delivery model. First, companies don’t have to invest in extensive hardware to host the software, and this in turn, allows buyers to outsource most of the IT responsibilities typically required to troubleshoot and maintain the software. The SaaS vendor takes care of it all.

There are a number of Microsoft services that are provided in a SaaS model. Exchange, Lync, and SharePoint online combined make up the Office 365 offering. Microsoft Dynamics is also provided online. The Azure setup also includes some application based SaaS offerings like Service Bus, Access Control Service, the new Azure Media Services, and you could even consider SQL Azure as a SaaS offering.

Platform as a Service:

Platform as a Service (PaaS) provides options for companies who want to build and run custom applications as services. Such companies maybe ISVs, value-added service providers, enterprise IT shops and those who needs custom applications. PaaS offers hosted application servers that have near-infinite scalability resulting from the large resource pools they rely on. PaaS also offers necessary supporting services like storage, security, integration infrastructure and development tools for a complete platform. PaaS is generally suitable for brand-new applications, as legacy applications often require extensive refactoring to comply with sandbox rules.

The Windows Azure offering includes PaaS. The benefit of PaaS is that you (an organization, company, etc.) don’t have to worry about maintaining the server hardware or Operating System on which your application runs. The service automatically handles that for you and it provides a level of fault tolerance / redundancy. The core Windows Azure Platform is made up of compute and storage. Beyond the core compute and storage elements the Windows Azure Platform cloud has the Windows Azure AppFabric and the SQL Azure Relational Database for service bus, security access control, and storage of highly structured data. The AppFabric is made up of two core features; the access control and the service bus.

Infrastructure as a Service:

Infrastructure as a Service (IaaS) is similar to traditional hosting, where a business will use the hosted environment as a logical extension of the on-premises datacenter. The servers (physical and virtual) are rented on an as-needed basis, and the IT professionals who manage the infrastructure have full control of the software configuration. The software composition may include operating systems, application platforms, middleware, database servers, enterprise service busses, third-party components and frameworks, and management and monitoring software.

The Windows Azure offering includes IaaS. Windows Azure Virtual Machines, the Infrastructure-As-A-Service (IAAS) offering, is a big leap for Windows Azure platform. Virtual Machines offer multi-tenant virtualized infrastructure, wherein end user can deploy applications. This specifically simplifies the migration of legacy applications to Cloud, offering more optimization avenues to the enterprise IT.

There are many advantages of deploying SharePoint in the cloud as IaaS. There is no infrastructure to monitor and IaaS also follows a utility service model, or pay-per-use, enabling greater flexibility and enhanced scalability. IaaS decreases the total cost of ownership of SharePoint, as there is no equipment which needs to be purchased or maintained.
Azure Blog Posting1

Additional information here:
http://msdn.microsoft.com/en-us/magazine/ee309870.aspx
http://blogs.technet.com/b/haroldwong/archive/2013/02/18/migration-and-deployment-windows-azure-as-a-paas.aspx
http://www.cloudave.com/9322/windows-azure-and-the-paas-context/