Cloud computing isn’t one monolithic type of offering, but an assortment of services aimed at meeting the various IT needs of an organization.

One such service provided via the cloud is infrastructure-as-a-service (IaaS), which delivers virtualized computing resources to organizations typically via the internet. IaaS is one of main types of cloud services, along with software-as-a-service (SaaS) and platform-as-a-service (PaaS).

In the IaaS model, third-party service providers host hardware equipment, operating systems and other software, servers, storage systems, and various other IT components for customers in a highly automated delivery model. In some cases, IaaS providers also handle tasks such as ongoing systems maintenance, data backup, and business continuity.

Organizations that use IaaS can self-provision the infrastructure services and pay for them on a per-use basis. Fees are typically paid by the hour, week, or month, depending on the service contract. In some cases, providers charge clients for infrastructure services based on the amount of virtual machine (VM) capacity they’re using over a period of time.

Similar to other cloud computing services, IaaS provides access to IT resources in a virtualized environment, across a public connection that’s typically the internet. But with IaaS, you are provided access to virtualized components so that you can create your own IT platforms on it—rather than in your own data center.

IaaS is not to be confused with PaaS, a cloud-based offering in which service providers deliver platforms to clients that allow them to develop, run, and manage business applications without the need to build and maintain the infrastructure such software development processes typically require.

IaaS also differs from SaaS, a software distribution model in which a service provider hosts applications for customers and makes them available to these customers via the internet.

The pool of IaaS services offered to clients is pulled from multiple servers and networks that are generally distributed across numerous data centers that are owned, operated, and maintained by cloud providers.

IaaS resources can be either single-tenant or multitenant, and they are hosted in the service provider’s data center.

“Multitenant” means multiple clients share those resources, even though their systems are kept separate. This is the most common way to deliver IaaS because it is both highly efficient and scalable, allowing cloud computing’s generally lower costs.

By contrast, single-tenant systems exist to serve clients who need strict separation from others, but at a higher cost. Single-tenant systems are more like traditional hosting services where a third-party provider essentially rents you dedicated space in its data center, but a true single-tenant IaaS also offers cloud-specific capabilities such as scalability and access to a wide range of platform technologies that hosting services often cannot provide.

You can create your own internal IaaS in your own data center using cloud computing technologies, but this is not true IaaS. It’s really a traditional data center that uses modern, cloud-style technologies. A cloud-based IaaS provider typically offers greater scalability, greater selection of technology options, on-demand availability, and usually much better security because it has created its IaaS platform to support hundreds or thousands of customers.

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Among the main business benefits of IaaS—just as in other cloud offerings—is that it enables a level of agility not possible with traditional IT infrastructures that rely on on-premises data centers.

IaaS platforms provide access to highly scalable IT resources that can be adjusted as demand for capacity changes. This makes the model ideal for companies that experience temporarily high workloads, such as what many retailers face during the holiday shopping season. It’s also well suited to small and mid-size businesses that expect to see growth in demand on steady basis.

Companies today are looking to be more flexible to better compete with web-based businesses that can make changes on the fly. Increased business agility and scalability are among the key business drivers to IaaS.

So is cost savings. By shifting IT infrastructure to the cloud, you can save on capital and operating expenditures. By paying for computing capacity only as it’s needed, you can reduce the costs of underutilized resources. You can also decrease IT hardware maintenance costs because of the decreased reliance on in-house data center hardware. Cloud-monitoring tools and a cloud-savvy cost model can help you identify hidden costs and wasted spending and avoid spiraling IaaS bills.

However, you do have to be careful to monitor your usage and make sure your applications and other systems use cloud resources efficiently. Because, in the metered world of IaaS, you’re paying for wasteful usage at the same price as effective usage.

One other benefit of IaaS is flexibility in terms of location. Organizations can access IaaS offerings from virtually any place where there is access to the internet.

There’s also the advantage of availability. Because cloud providers rely on multiple facilities, there is no single point of failure. They also distribute their facilities to reduce latency based on where the customer location is.

You can use IaaS for a variety of workloads. But according to a July 2019 Gartner report, there are typically four broad categories of need for these services:

Among the leading IaaS providers are Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform, IBM Cloud, Alibaba Cloud, Oracle Cloud, Virtustream, CenturyLink, and Rackspace.

The major technology components of every IaaS offering include compute resources, storage, and networking.

Some also offer self-service interfaces including web-based user interfaces and APIs, management tools delivered as services, and cloud software infrastructure services.

Key features of IaaS offerings include, according to Gartner:

As with any other type of cloud service, IaaS comes with several risks and challenges that organizations need to address.

Among the key concerns are cyber security threats. Protecting data in the cloud depends highly on the security of the cloud infrastructure owned by the service provider. VMs could be exposed if there’s a compromised hypervisor, for example.

There’s also the security risks that come when employees of the service provider have direct access to the cloud infrastructure, including hardware, networks, and hypervisors.

Some of these security and privacy risks might lead to difficulties complying with government regulations. This is especially true for companies in highly regulated industries such as health care and financial services.

Another potential challenge is the complexity of managing an IT environment that relies heavily on cloud services provided by an outside entity. There will naturally be some loss of control as a result of relying on a service provider for critical IT functionality, and because IaaS providers own and maintain the infrastructure, management and monitoring might be more difficult for companies.

Finally, there are risks associated with the service providers themselves. As Gartner notes in its report, many of the providers in the market are re-evaluating their IaaS businesses as the market continues to consolidate around AWS, Microsoft, and Google—so you should be aware that some providers could make significant changes in the direction of their IaaS strategy. That includes replacing their current offering with a new platform, or even getting out of the IaaS business altogether.

Despite these and other challenges, IaaS is clearly on the rise as a way for organizations to create more agile and cost-efficient IT environments.

This story, "What is IaaS? Infrastructure-as-a-service explained" was originally published by InfoWorld.