Small business owners and managers are familiar with the costs associated with information technology. IT for business has historically required large investments in physical equipment, software, and additional employees to manage and support IT-related activities. Over time, your internal IT investments can result in larger capital expenditures and payroll costs—not to mention the extra office space required to accommodate the growing number of machines and people needed to run your business IT.

But, it doesn’t have to be this way. Today, business IT has become a service that can be used in one form or another by businesses of nearly any size. It is no longer necessary for businesses to build an onsite server room, purchase and maintain software licenses, or hire technicians to set up and manage essential IT systems.

Business IT as a service offers several advantages over traditional solutions. It lets you rapidly build your IT services up or down according to your business’s changing requirements. You no longer need to invest money on the purchase and maintenance of physical servers, or pay the ongoing expenses related to complex software licensing agreements. And, using business IT as a service means you don’t need to have a large onsite IT department.

There are three key levels of business IT as a service:

  1. Infrastructure as a Service (IaaS)
  2. Platform as a Service (PaaS)
  3. Software as a Service (SaaS)

Let’s take a more detailed look at these different IT service levels, and what each one can provide for your business.

What is Infrastructure as a Service (IaaS)?

IaaS is the foundation level of business IT as a service. It replaces the corporate server room and its racks of noisy, heat-generating equipment with an offsite server environment provided by an IaaS vendor. IaaS hardware is commonly used to host websites, or to provide offsite storage and backup solutions.

With IaaS, you get just the hardware you want to access. You still need to provide all of the necessary software, including applications and operating systems.

IaaS helps you to lower capital costs by not having to purchase servers, networking hardware, or mass storage systems. IaaS also lets small businesses access computing hardware that they would normally not be able to afford.

One of IaaS’s key advantages over traditional business IT is its scalability. With IaaS, computing hardware resources can be scaled up or down remarkably quickly—a perfect match for today’s dynamic business environments.

Finally, IaaS is an excellent way to protect your business assets in the event of a catastrophic event. For example, think of how much customer data you could potentially lose if your site was to be destroyed by a fire, tornado, or other natural disaster. IaaS vendors typically provide excellent levels of security and resilience, which reduces the overall risk to your vital business data.

What is Platform as a Service (PaaS)?

Platform as a Service takes the hardware component of IaaS and adds software to it. For instance, you could use PaaS to create a development platform for your software developers to use to create a new mobile app for your business. and Google App Engine are popular PaaS vendors.

PaaS helps to avoid the capital costs associated with many software licenses, since PaaS-provided software solutions are usually classified as operating expenses—this can vary from state to state, however; check with your accountant or a similar expert.

Common software platforms offered by PaaS vendors include:

  • Software development suites
  • Database management systems
  • Middleware used to connect applications together
  • Business intelligence and analytics

Platform as a Service shares many advantages with Infrastructure as a Service. PaaS lets you reduce the number of onsite IT support staff required to maintain your business software. PaaS can be used to efficiently scale specific departments and projects up or down according to changing business requirements. And, PaaS offers you very robust security and disaster recovery features.

One key benefit of PaaS is it has created affordable access to traditionally expensive business software systems. In the past, customer relationship management (CRM), business intelligence (BI), and Big Data analysis software tools were mostly exclusive to Fortune 500 corporations. PaaS has made high-end business IT much more accessible to smaller businesses.

What is Software as a Service (SaaS)?

Have you ever used a mobile email app or Microsoft’s Office 365 before? If so, you have experienced Software as a Service.

SaaS is an IT solution that offers a subscription-based model for software applications. Businesses can subscribe to individual apps, like a mobile app that lets employees access their documents over a corporate VPN. Or, businesses can subscribe to an application bundle like Microsoft’s Office 365 or Adobe’s Creative Cloud. LawDepot is another type of SaaS, where you can create legal documents using a web application.

As you would expect, Software as a Service offers the nested advantages of PaaS and IaaS. With SaaS, companies don’t have to build a specialized hardware infrastructure, or implement and maintain a sophisticated internal software platform. There is also no need to constantly purchase and keep track of software licenses, as SaaS is entirely subscription-based.

SaaS also lets businesses provide mobile employees access to the applications they need to perform their job from any location.

What is the Future of Business IT as a Service?

Looking ahead, the future of business IT as a service will likely follow the familiar trajectory most technology products have experienced during their ongoing development. New technologies tend to be dominated by established industry giants in the beginning, with new companies gaining relevant market share by offering more specialized products to smaller, but still significant niche markets.

The business IT as a service industry is currently dominated by a number of very large vendors, including titans like Google, Amazon Web Services, Microsoft, Adobe, and While no one should ever seriously consider going up against Microsoft by releasing a new SaaS office productivity suite, there is growing room for vendors to create custom service-based IT products which aren’t covered by the offerings from the industry’s 800-pound gorillas.

Inevitably, organizations should expect to see further advances in cloud computing, and increased growth in mobile device technology and usage, to continue to make business IT as a service the dominant model for information technology in the workplace.

Do you think your business would benefit from outsourcing its IT systems to one or more “as-a-Service” providers? Let us know in the comments.

Posted by Aaron Axline

Aaron Axline is an author, technology journalist, blogger, and knowledge management expert.