There are basically 3 types of cloud service models:

Software as a Service (SaaS)

Software as a Service (SaaS) makes the software available over the internet. This model allows software applications as a service to the end users. It refers to a software that is deployed on a hosted service and is accessible via the internet.

There are several SaaS applications such as Billing and Invoicing System, Customer Relationship Management (CRM) applications, Help Desk Applications, Human Resource (HR) Solutions.

Characteristics:

● Available on demand.

● The software is are maintained by the vendor rather than where they are running and hence making it cost effective.

● The license to the software may be subscription based or usage based and it is billed on recurring basis.

● Scaled up or down on demand.

● Automatically upgraded and updated.

● SaaS offers a Shared Data Model.

● All users are running the same version of the software.

Infrastructure as a Service (IaaS)

Infrastructure as a Service (IaaS) provides access to fundamental resources such as Physical Machines, Virtual Machines, Storage etc. All of the above resources are made available to the end user via server virtualization. Moreover, these resources are accessed by the customers as if they own them.

Characteristics:

● Virtual machines with pre-installed software.

● Virtual machines with pre-installed operating systems such as Windows, Linux, and Solaris.

● On-demand availability of resources.

● The computing resources can be easily scaled up and down.

Platform as a Service (PaaS)

Platform as a Service (PaaS) offers the run time environment for applications. It also offers development & deployment tools, required to develop applications. PaaS has a feature of point-and-click tools that enables non-developers to create web applications.
Force.com platform is an example of PaaS in salesforce.

Characteristics:

● PaaS offers a browser based development environment. It allows the developer to create a database and edit the application code either via Application Programming Interface or Point-and-Click tools.

● PaaS provides built-in security, scalability, and web service interfaces.

● PaaS also provides web services interfaces that allow us to connect the applications outside the platform.

Anything-as-a-Service (XaaS) is yet another service model, which includes Network-as-a-Service, Business-as-a-Service, Identity-as-a-Service, Database-as-a-Service or Strategy-as-a-Service.