In cloud computing, you might hear the terms SaaS, PaaS and IaaS.  These are simply different logical layers in the stack.  You can visualize it like this:

As you move up the stack, you increase abstraction.  As you move down the stack, you increase control.  Here is a brief summary of each term:

• Infrastructure as a Service (IaaS) - In this case, computing resources (compute, storage, and network) are exposed as a capability.  Instead of owning, managing or controlling the underlying infrastructure, you rent the infrastructure, as a service.  An example is  Amazon Elastic Cloud Compute (EC2).
• Platform as a Service (Paas) - In this case, programming platforms and tools (such as java, python, or .NET) and/or building blocks and APIs for building cloud-based applications and services are made exposed as a capability.  Examples include Amazon Simple Storage Service (S3), Azure Storage, and Force.com.
• Software as a Service (SaaS) – In this case, applications are exposed as a service running on a cloud infrastructure.  Examples include SalesForce.com and Microsoft Office Online.

For my related posts on cloud, see:

• Visual Model of Cloud Computing
• Cloud Defined