IaaS, the Niche SaaS Power

Right now, in this world, there is a young startup entrepreneur out there. They are sitting up at their desk during a late-night coding session, They have one question on their mind: “What service should I use for my apps xxx?” It could be the question of a database service, messaging service, proxy service even security service. Whichever option, they are thinking of purchasing a service for their web-based startup app during their MVP (Most Valued Product) planning and development stages. You know what? It is not just them.

Right now, there’s a project manager of a Fortune 500 tech company out there. Staying up late thinking the same thing as the young developer. The only exception being it’s to support their already massive tech base and not a new one. There’s also someone who isn’t part of any startup or company and is simply experimenting and learning programming for the first time. They are all contemplating what services to pay for and use for their experiments and growth. What are these services called? Why does everyone seemingly use them? They are called SaaS and they’re everywhere.

What is Saas?

SaaS is an abbreviation of Software-as-a-Service. “Saas is a software distribution model in which a cloud provider hosts applications and makes them available to end users over the internet. E.g: An independent software vendor (ISV) may contract a third-party cloud provider to host the application”. This is an effective description given by TechTarget.com .In simpler terms, Saas is when you the end user, pay to rent software solutions.

What is Iaas?

IaaS is an abbreviation of Infrastructure-as-a-Service. “Infrastructure-as-a-Service, commonly referred to as simply <IaaS> is a form of cloud computing that delivers fundamental computer, network and storage resources to consumers on-demand, over the internet, and on a pay-as-you-go basis”. This is an excellent explanation provided by the IBM company.

To some reading this it might be strange. Doesn’t IaaS seem very similar to Saas? the answer to this is YES! SaaS generalizes to all third-party services which you subscribe to through cloud service providers but IaaS is a SUBSET of SaaS. With IaaS you subscribe for more specific cloud services. To get the type of cloud services meant for the infrastructure and base of an application. Hence, the name “Infrastructure-as-a-Service”. They are renting out to you the actual infrastructure for your web-based product. Paas (Platform-as-a-Service) and IaaS are both subsets of Saas. They are not on their own.

Below is a diagram illustrating this:

For the sake of brevity of this article, we will not be discussing PaaS but just SaaS and IaaS with a focus on IaaS.

IaaS is a type of SaaS. We can see from the diagram above the overall structure of this dynamic. IaaS is very specified to offering the core Infrastructure products that a web-based application will need. Although they also do count as a SaaS people do not usually associate SaaS with IaaS. This is because SaaS is mainly in reference to ready-to-use web application services and not the actual infrastructure like IaaS. The relevance of IaaS can be measured in its industry revenue over time and its use audience flexibility.

IaaS is fueling the tech world:

You might ask yourself, “How is IaaS fueling the tech world? How is it effective for revenue and long-term usage?” Let’s get down to it.

IaaS services by the different IaaS providers are conquering their niche field and monopolizing the tech area. As a result of this monopolization of the market, they can drive innovation and output of their services, reaching more and more tech people and companies in need of IaaS services. In 2021 the top 5 IaaS services grew 41.4% in revenue. This means that divided among those five, they made 91 Billion USD which is a 27 Billion USD jump from their 64 Billion USD profit in 2020 as reported by Gartner.com. The amount of revenue in this tech niche is increasing greatly year by year. As such its influence also increases.

In 2022 a study found that 63% of technical professionals or business professionals (from a pool of 750 subjects) “heavily” use the cloud systems offered by IaaS services. This is an increase from 59% in 2021 and in 2021 it was an increase of 53% from 2020, this was presented by aag-it.com. 50% a year growth among old and new tech professionals in different areas of tech? That suggests a heavy variety of uses in different tech fields as well.

Those are but a few examples of IaaS and its growth. Which companies are most notable in their IaaS products?

• Microsoft
• Google
• IONOS
• Alibaba
• Huawei

I will not state the above companies’ revenue collection over the last few years in the IaaS field as we should not compare them, however, one should keep in mind each one is leading in this field and is progressively getting better. That said, let’s use three of the companies as examples and showcase their leading IaaS solutions. This isn’t revenue comparison as much as showcasing just how valuable and relevant IaaS-based solutions are.

Google Cloud:

By now most people in tech have most definitely heard of Google Cloud by contact with their products. Google’s IaaS services include Google Cloud Storage and Google Compute Engine.

Google Cloud Storage:

“Cloud Storage is a managed service for storing unstructured data. Store any amount of data and retrieve it as often as you like.” This definition was given by Google. In other words, what does this mean? It means that you as an organization/company can treat Google Cloud Storage like your own data center.

Google Compute Engine:

“Compute Engine is a customizable compute service that lets you create and run virtual machines on Google’s infrastructure”. This definition was given by Google. Virtual machines are exactly what they sound like. A computer that uses software to mimic a computer and its properties to run programs and deploy apps. For more on virtual machines check here.

IONOS Cloud Cubes:

To put it simply, IONOS is a web hosting and cloud services partner for small and medium-sized businesses. They exclusively offer and specialize in IaaS solutions.

IONOS Cloud Cubes:

What are IONOS cloud cubes? They sound complex but simply they are enterprise-grade virtual private servers for businesses. They offer a range of services in the private server space such as; Scalable environments to meet specific software needs, automated instance configurations, and even the ability to run your private cloud cube (server) on a virtual machine. They offer all this and more, as a small to medium-sized company trying to continually scale IONOS is not one to forget.

Microsoft Azure:

Microsoft might be mentioned last but not by a stretch does this mean they are the least. Microsoft Azure is part of the Microsoft company which offers IaaS products. Two products they offer in their IaaS range are Azure Networking and Azure Security.

Azure Networking:

Azure networking has a whole range of sub-products for maximum affordability and necessity for clients. However, they are still all under Azure Networking and features include; Automated load balancing, automated Traffic management to the server, privatized WAN portal, internet traffic routing options, a singular delivery point for global micro-service applications even when running concurrently, etc. For a full list check here.

Azure Security:

IaaS solutions are not just related to storage, hosting or even networking. They are also offered in IaaS. One may ask “Aren’t online security services of all types SaaS?”. Yes, usually, this is true, but remember IaaS are SaaS products but just in a specific niche. In this case, Azure security is specified to an IaaS, why? Azure has made their security features built into their infrastructure and is not necessarily a stand-alone product of its own.

Similar to Azure Networking, Azure Security breaks up the service into tiny bits for more specified options for corporate partners. However, they all still fall under Azure Security. Some of the services included in Azure Security are; the making and storage of crypto-graphically verified tamper-proof ledger, DDoS protection, Cryptographic key vault, built-in web application firewall, email protection, and security management unification for cloud and on-premise protection.

IaaS Dominance:

The SaaS market globally is growing as a whole. Forbes Business Insight even valued the global SaaS market as a giant 240 Billion USD in 2022. Forbes Business Insight also stated 108 Billion USD was directly from IaaS products in 2022. That is close to half of the total profits of SaaS products and types in 2022. With such a strong growth rate of 14-22% per year (different sources give different growth rates) how can one deny strength in IaaS products?

Earlier on in the article, we specified that IaaS is best for companies and not necessarily best for individuals. This is because individuals and very fresh startups are better off buying full SaaS products. Startups and individuals usually have no money to work with or time. They cannot be like medium-sized companies or established small startups who can afford to “splurge” on their own custom application make-up and functions. It is more time effective and cost-efficient to focus on innovating the product and have another company do the grunt work.

If you’re an established startup, medium enterprise, or large enterprise then IaaS services are realistic options. If not? Stick to full-on SaaS products and not a SaaS niche like IaaS.

Keeping the previous paragraph in mind. It is no secret that IaaS products are widely dominated by some of the biggest tech companies in the world such as Amazon, Google, Microsoft, Huawei etc. Some of these companies are even in the process of monopolizing the IaaS industry further and further. This may act as a deterrent for developers and small-medium businesses. It should not be. Yes, the industry is becoming monopolized, however, this does not mean you cannot enter another niche in the IaaS world or leverage your company to effectively use IaaS products as much as possible to boost your revenue. Innovation is happening within IaaS products and it is growing and strengthening with time. IaaS solutions are the best subset of SaaS, and you know what? the growth we have seen in the last 5 years of its infancy is only the start of innovative cloud service solutions.

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