Public Cloud platforms broadly provide three service models: Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).
SaaS (Software as a Service): SaaS is user-friendly with the advantage of scaling. SaaS uses the web to deliver applications that are managed by a third-party vendor and that interface is accessed on the client’s side. SaaS applications can be directly run from a web browser without any downloads or installations. They might require plug-ins. SaaS eliminates the need to run and install applications on computers. Some offerings include customer relationship management, email and collaboration, and healthcare-related applications.
Examples: YouTube, Skype, Gmail
PaaS (Platform as a Service): PaaS is used for applications, and other development while providing cloud components to software.The developers gain a framework that they can build upon to develop or customize applications. It makes development, testing and deployment of applications quick, simple and cost-effective.
Examples: Google Apps Engine, Beanstalk
Iaas (Infrastructure as a Service): IaaS are self-service models where we get the infrastructure from remote data centre. IaaS allows you to build anything on the infrastructure and manage them. It is responsible for managing applications, data, runtime and middleware.
Examples: Amazon EC2, Google Compute Engine (GCE)
SaaS is less likely to cause any problems as software is a part of cloud services. In the PaaS service model, the enterprise generally does not have control over the operating system but might have control over the deployed applications. Enterprise has control over operating systems and deployed applications but does not manage the underlying infrastructure in IaaS.
Hence, factors like number of users accessing software, number of processors on the device hosting and product use rights are taken into consideration while considering multiple cloud licensing models. Vendors like Google Cloud and Amazon uses pay-per-use or subscription based licensing models. Salesforce.com uses a subscription based licensing model. Microsoft has created dedicated software license models based on processor license (PL) or subscriber access license (SAL) which depend on the number of end users connected. Google cloud supports building bringing your own licenses (BYOL) to compute engines. Thus, Google provides on-demand in addition to BYOL licenses.
On-demand, pay-as-you-use and short-range licensing models are broadly known as cloud computing models.
Source: Cloud Computing Bible, Maste Cloud Computing