Infrastructure as a Service

Software as a Service (Saas) like Salesforce.com is really valuable, but it's only part of the story.  For development projects it's important to have Platform as a Service (Paas) options, like Windows Azure, and Amazon's EC2.  However, even that doesn't complete the picture, as IT Professionals are increasingly in need of infrastructure in the cloud, or Infrastructure as a Service (IaaS). 

IaaS may be the least understood but most critical component of the cloud service story.  Essentially, IaaS is a server that runs in the cloud.  IaaS is needed today for many different things (e.g. testing, etc), but in the near future I think we're going to see IaaS put pressure on the physical server business as it can increasingly serve as an outright replacement for a physical server.  While there are still technology constraints on running Windows Server in the cloud, this problem is going to be solved soon, and then look out.  This will have extraordinary implications for traditional server vendors, as cloud services begin to "eat" the physical server business.