Office 365 is SaaS providing an online version of the Office suite (Word, Excel, Outlook, PowerPoint, One Note, Access, Lync, etc.) along with SharePoint, Lync and Exchange.

In contrast, Windows Azure is IaaS and PaaS. Windows Azure can be divided into Compute, Data Services, App Services, Networking and Store.



Software as a Service (SaaS)
: In the SaaS model, customers are provided access to cloud-based application software, services and databases on a subscription or pay-per-use basis. Providers manage the infrastructure reducing the dependence and need for on-premises infrastructure. This has the effect to significantly reduce infrastructure costs for the customer and simplifies maintenance and support of the application, service or database as well. SaaS is sometimes referred to as “on-demand software”.

Infrastructure as a Service (IaaS)
: IaaS clouds offer computing resources often built on pools of hypervisors including Hyper-V or Xen or KVM or VMWare although they can also come in the form of physical resources as well. Virtual-machine disk image libraries, raw (block) and file-based storage, firewalls, load balancers, IP addresses, virtual local area networks (VLANs), and software bundles are resources also provided in this model.

Platform as a Service (PaaS)
: In the PaaS model, cloud providers deliver a computing platform, typically including operating system, programming language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software layers. With some PaaS offers like Windows Azure, the underlying computer and storage resources scale automatically to match application demand so that the cloud user does not have to allocate resources manually.

Info from http://www.gordiandynamics.com/what-is-the-difference-between-windows-azure-and-office-365/

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