Technology

Infrastructure as a Service (IaaS)
This is the base layer of the cloud stack.
It serves as a foundation for the other two layers, for their execution. The keyword behind this stack is Virtualization.
Let us try to understand this using Amazon EC2. In Amazon EC2 (Elastic Compute Cloud) your application will be executed on a virtual computer (instance). You have the choice of virtual computer, where you can select a configuration of CPU, memory & storage that is optimal for your application. The whole cloud infrastructure viz. servers, routers, hardware based load-balancing, firewalls, storage & other network equipments are provided by the IaaS provider. The customer buy these resources as a service on a need basis.
Platform as a Service (PaaS)
Now you don’t need to invest millions of $$$ to get that development foundation ready for your developers. The PaaS provider will deliver the platform on the web, and in most of the cases you can consume the platform using your browser, i.e. no need to download any software. It has definitely empowered small & mid-size companies or even an individual developer to launch their own SaaS leveraging the power of these platform providers, without any initial investment.
PaaS Layers
Cloud OS
Cloud Middleware