Platform as a Service (PaaS) operates in a similar manner to SaaS, but operates at a lower ‘level’. PaaS is targeted towards companies who wish to develop or host their own applications in the cloud - the service provided is a platform on which software applications can be developed and deployed. Heroku is a well-known cloud application building platform – such providers would typically provide servers, network infrastructure and operating system software, as well as database software and software development runtimes.
PaaS offers convenience and simplicity for companies who wish to develop and host software and applications, and eschews the costs involved with physical server installations and maintenance, as well as the time cost required to get a development environment up and running. However, if you choose to use a PaaS environment to host your application, service availability can be a concern - any downtime of your provider would result in downtime to your customers. In a similar vein, any changes to the environment by the provider - for example, using a different set of development tools - could have a detrimental impact on your business operations.