ITaaS? SaaS? IaaS? PaaS? Wonder what it all means for you and your business? Read here to find out how to spell out 'solutions' from the alphabet soup!

ITaaS? SaaS? IaaS? PaaS? Wonder what it all means for you and your business? Read here to find out how to spell out ‘solutions’ from the alphabet soup!

If you’ve been pondering a move to the cloud, I have no doubt you’ve been seeing a lot of acronyms lately. ITaaS, SaaS, IaaS, PaaS…what does it all mean, and how can you make sense of this “alphabet soup” for your business? Fear not: While the acronyms associated with the cloud might seem intimidating at first, the concepts they stand for are really simple. Here’s a primer on cloud service offerings to help you get started.

ITaaS (Information Technology as a Service): First, know that “cloud” could be replaced with the first of our acronyms, ITaaS. What ITaaS means is that instead of your company running its own data center, someone is running it for you and providing services and support through the Internet. The term ITaaS might apply to your whole IT operation or, more likely, to some components; specifically, to certain aspects of your software, infrastructure or platform, as you’ll see below. Companies pay a monthly fee to the cloud (ITaaS) service provider, reducing or eliminating the need to buy, maintain, support, upgrade and ultimately replace one or more IT systems in house. This “pay-as-you-go” model shifts the IT budget from one steeped in capital expenditures to one built around recurrent, more predictable operating expenses—a key advantage, as you’ll see.

Now that we’ve demystified the term “cloud” and the ITaaS acronym, let’s move on to the components of ITaaS. Cloud service offerings come in three flavors:

SaaS (Software as a Service): One cloud service option is SaaS, which means accessing software applications via the Internet. With SaaS, you eliminate the need to buy software licenses, install and update the application, maintain and patch the program, replace it when needed, and ensure its uptime and accessibility. Typically, users visit a web site to log in and access the application. SaaS enables a very rapid deployment of new or updated applications. Create accounts, e-mail your users a URL, and you’re in business.

Example: A law practice wants to take advantage of a specialized legal application but has limited in-house IT staff. The practice identifies an application, signs a contract with the vendor, creates accounts, has staff trained and sends out a link to the new application. They pay one monthly fee to the cloud provider and minimize upfront expenses. Through SaaS, the lawyers can stay focused on law while their IT “skeleton crew” stays focused on day-to-day support.

IaaS (Infrastructure as a Service): A second option is IaaS, which means utilizing a cloud service provider’s hardware, which is located offsite, via the Internet. Storing data “in the cloud,” i.e., on a cloud provider’s server, is one form of IaaS. The key distinguishing feature here is that IaaS involves hardware. IaaS eliminates or reduces the need to purchase, house, maintain, backup and ultimately replace hardware in house.

Example: A bank stores daily customer and financial data on an in-house server. It backs up all of this data nightly to a cloud provider’s server, where it is stored as dictated by the bank’s retention policy and regulatory requirements. IaaS minimizes the level of hardware that the bank needs to purchase as capital expenditures and maintain internally, while ensuring business continuity and disaster recovery support through nightly backups.

PaaS (Platform as a Service): The third option is PaaS, which means using an IT platform from a cloud provider and accessing it via the Internet. Through PaaS, you gain access to applications, hardware, databases, networking, security and more for one predictable monthly fee. Rather than build and maintain a platform in house, you access one built and maintained by the cloud service provider.

Example: A start-up needs an entire customer relationship management system to run its business. Time is of the essence, as is cost containment. The firm contracts with a PaaS provider so that it can get up and running fast, without needing the skills and capital investment to make it happen.

Now that you know what the letters stand for, how do you know which option is right for your business? First, know that you’re not limited to just one flavor; you can combine the options for different aspects of your IT shop. You might use SaaS for your recruiting application and IaaS for data backup and recovery. You might pursue a hybrid cloud model, handling some of your IT in house while housing other aspects in the cloud. It all depends on what you need.

Second, look at your organization and your IT department. What resources—including both dollars and capabilities—do you have in house? Where are the gaps? As a small startup with limited capital, your best option might be to use relatively low-cost SaaS for key applications. As a large firm with more capital at your disposal, you’ll have a decision to make: incur the capital expenditures to build and support your platform in house, or shift to an operating expense model by accessing it in the cloud through PaaS?

When you get down to it, cloud computing isn’t really about letters at all. It’s about dollar signs. Figure out how the dollars and cents of cloud computing can work best for your business and go after it. The alphabet soup of the cloud just might spell success for your business.