Software as a Service (SaaS), also known as on-demand computing, is changing the landscape of information technology in a profound way. By replacing locally managed stacks of networking, hardware, and software resources with an Internet-based utility, this model has changed how business applications are delivered, bringing new levels of ease, adoption, and success to the challenging area of enterprise software. And just as the evolution of the Internet affects almost all industries, the evolution of the on-demand model promises to change enterprise technology and to offer new opportunities for IT productivity and impact.
Gunther Gerlach

Infrastructure as a Service (IaaS)
IaaS clouds make it very easy and affordable to provision resources such as servers, connections, storage, and related tools necessary to build an application environment from scratch on-demand. IaaS clouds are the underlying infrastructure of PaaS and SaaS clouds. A common characteristic of IaaS clouds is that they are more complex to work with but with that complexity comes a high degree of flexibility. So, these are generally lower level services in the grand scheme of things; not in a derogatory sense of course. You’ll be dealing with virtual machines, operating systems, patches, and various other issues. You’ll likely require some specialized help to make it all work well.
Gunther Gerlach