Before we discuss why virtual machines in the cloud are important we first need to briefly discuss the basics of IaaS, PaaS, and SaaS in cloud computing.

IaaS, or Infrastructure as a Service, is the lowest tier offering in a cloud environment. This offering most resembles the traditional on-premises approach of purchasing hardware and other components in order to build the necessary infrastructure to run and support a business. One may recall having “server rooms” in an office building that housed everything from user home directories, file servers, and domain controllers to an intricate connection of networking components to allow seamless connections between users and resources. In Azure, one may continue to have full control and flexibility over their servers, just in a cloud environment by controlling all software and services that run on top of these virtual servers including the operating system itself.

PaaS, or Platform as a Service, is a middle-tier offering where you don’t focus on the virtual machine itself but rather on the actual platform offerings that allows you to build your own custom applications and software components. An example of this would be Azure App Services which is a platform that allows you to build and deploy Web applications in Azure as a service to customers. There is no need to worry specifically about the server virtualization, storage, and network plumbing happening underneath.

Finally we have SaaS, or Software as a Service, which is the upper-tier offering when customers would like to simply consume existing software applications in the cloud. A perfect example of this is Office 365, where users access their email which is hosted in the Azure cloud. In this scenario Azure completely handles everything including the infrastructure and platform. Once setup, users consume the service directly from Azure.

As you move from Software as a Service to Infrastructure as a Service you notice an increase in responsibility. However, at the same time, you also gain the ability to further customize your solutions having more options at the compute, storage, and networking layers.