Cloud Computing - What is SAAS , PAAS and IAAS ?

Software as a Service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. Platform as a Service (PaaS) is a paradigm for delivering operating systems and associated services over the Internet without downloads or installation. Infrastructure as a Service (IaaS) involves outsourcing the equipment used to support operations, including storage, hardware, servers and networking components.

IAAS (Infrastructure As A Service) :
The base layer - Deals with Virtual Machines, Storage (Hard Disks), Servers, Network, Load Balancers etc
Example: Google Compute Engine (One can develop programs to be run on high performing google's computing infrastructure)

PAAS (Platform As A Service) :
A layer on top of IAAS - Runtimes (like java runtimes), Databases (like mySql, Oracle), Web Servers (tomcat etc)
Example: Google App Engine (One can develop applications and let them execute on top of Google app engine which take care of the execution)

SAAS (Software As A Service) :
A layer on top on PAAS - Applications like email (Gmail, Yahoo mail etc), Social Networking sites (Facebook etc)
Example: Gmail, Google+ etc (One can use email services and extend email/google+ based applications to form newer applications)