IAAS stands for “infrastructure as a service” which offers customers “on-demand” access to computational, storage and  networking services.  The setup, payment and use of these resources are easily scaled up and down as the consumer’s needs  change.  The boundaries between IAAS and PAAS are fluid, and will likely continue to change as the technology develops.  IAAS  is enabled by the technology of hardware virtualization, which  allows computer servers to host multiple virtual machines (VMs for short) which each behave like an individual computer,  capable of running their own operating systems.  Customers begin by renting time from a IAAS provider such as Amazon EC2 or IBM  Smart Cloud Enterprise.  The customer specifies what type and  how many VMs that they intend to lease and the lease period.  
Upon payment, customers can immediately access their computing  resources from an Internet connected web browser.  If the   customer needs more computing power, they can instruct their programs to allocate these resources automatically, allowing  online companies to dramatically increase and reduce their IT infrastructure and expenditure.  This ability to “auto-allocate”  computing resources represents a revolutionary tool for online companies.  From the onset, a firm can access exactly the IT  resources it needs with negligible setup time.  
Another contributor to IAAS is the lower cost of “commodity hardware” which can be installed in centralized data centers.   This increase in computing capacity allows firms with large IT departments (such as Google or Amazon) to offer their excess  capacity to customers as IAAS.  Moore’s law, a statement on the ability of scientists and engineers to double the capacity of  transistors in computer microprocessors every two years, has  allowed the capability of hardware to increase and its cost to  decrease.
The final keystone in the successful implementation of IAAS is  the growth of the Internet itself, which bridges the gap between  different hardware and software systems.  It is the “central  hub” bridging gaps between existing hardware infrastructure.   Access to high speed Internet connections is a prerequisite to  IAAS because it enables customers to remotely access their  leased resources.  
Customer access to IAAS is becoming increasingly easy.  Hardware  and software flexibility is a crucial part of IAAS.  It allows  customers to free themselves of technical concerns and focus on using their leased computing resources.  As new computers become  available, they can be installed in state of the art facilities of the IAAS providers.  In this way, a crucial division of labor  function has been performed.  For limited projects where a quick calculation is required, a customer can lease a single hour of  CPU time on the most sophisticated hardware available.  With  minimal difficulty customers can setup and provision their own customized “on-demand” IT department.
 
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