What is IaaS in Cloud Computing?

Infrastructure as a service (IaaS) has become vital as more companies move to the cloud. IaaS allows companies to rent IT infrastructure—servers, storage, networking resources within targeted data centres. Instead of buying and managing their own expensive hardware, companies can scale up or down as needed and pay for only what they use (pay-as-you-go IaaS model.)

The flexibility is a significant benefit. With IaaS, businesses avoid overpaying for more infrastructure services than they currently need. Their costs shift from huge upfront capital investments to more manageable monthly operating expenses. This is easier on their bottom line.

IaaS models also allow businesses to respond faster to changes in demand. Need to quickly expand due to unexpected growth? IaaS makes scaling globally a breeze.

This article will provide an in-depth overview of what is IaaS in cloud computing, its key features, and how it works in the finance industry. We’ll also explore the differences between IaaS, PaaS, and SaaS, the applications of IaaS, and the advantages of IaaS.

What is IaaS in the context of Cloud Computing?

So, how does IaaS work? IaaS providers house a vast inventory of servers, networking resources, storage, and data centre capacity. Some providers even provide clients access to deploy and manage it all through a self-service web portal. For example, a financial firm could log in and instantly spin up 100 virtual servers preloaded with trading software.

Flexibility and Scalability

Clients utilise only the exact IaaS architecture components they need at a given time. The sophisticated development tools of IaaS providers allow firms to quickly scale capacity up or down based on real-time demands.

So, if a bank anticipates major trading volume on a given day, its systems can programmatically deploy additional cloud servers to accommodate the extra activity. The bank can shut them down afterwards, thereby only paying for the extra capacity when needed.

Security

IaaS uses economies of scale to implement the latest physical and cybersecurity capabilities across their massive networks of data centres. This includes extensive perimeter barriers, advanced threat detection, access restrictions, and more robust measures than most individual organisations could justify implementing in their own data centres.

In the finance industry, most companies handle highly sensitive client data, and these IaaS security measures are critical.

Additionally, financial organisations can use private cloud options to restrict system access to only internal users and configure multi-factor authentication, granular permissions, and network encryption tailored to their workloads.

Management

Clients determine and configure the virtualized computing resources they wish to utilise, while IaaS service providers focus on keeping global data centres, hardware, and networks operating efficiently behind the scenes 24/7.

The automation of infrastructure maintenance like failover redundancies, load balancing, hardware lifecycles, and software updates allows customers to focus their technical resources on delivering strategic business value rather than infrastructure maintenance.

For a global investment bank, this means traders can focus on split-second market opportunities without worrying about outages or latency. Compliance officers also gain assurance that systems will adapt on demand to changing regulations.

IaaS vs PaaS vs SaaS

When adopting cloud services, it is important to understand the difference between the three main service models: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

Each of these service models (IaaS PaaS and SaaS) provides different layers of cloud computing services with increasing abstraction from the underlying infrastructure.

Let’s explore the difference between IaaS, PaaS and SaaS below:

IaaS

The most basic layer, IaaS, provides access to fundamental computing infrastructure, such as servers, storage, networks, and operating systems, sometimes through a self-service portal.

The IaaS provider will manage data centre infrastructure resources and keep everything running reliably. However, the client is responsible for managing everything that runs on top of that cloud computing service, i.e. applications, data, and runtimes.

IaaS offers the most flexibility and complete control but requires more IT resources for its management.

PaaS

Platform as a Service (PaaS) is a cloud computing model that refers to a preconfigured platform for operating applications that don’t require you to manage the underlying infrastructure. This typically includes the operating system, programming languages, databases, and web servers, allowing faster app development and deployment. Platform as a Service reduces flexibility but eases the burden on in-house IT resources.

In essence, PaaS builds on top of IaaS by giving you access not just to infrastructure but an entire platform to develop, run, and manage applications without having to maintain the infrastructure below it.

SaaS

The highest layer, Software as a Service (SaaS), is an IaaS service model that provides complete turnkey applications hosted in the cloud and accessible via browser. Everything from the physical infrastructure to the application logic and data is managed by the Software as a Service provider. This offers simplicity but can also entail more restrictions.

IaaS solutions provide infrastructure building blocks, PaaS offers an application development and deployment platform, and SaaS delivers off-the-shelf applications. Companies can combine options from each layer based on their technical capabilities and business needs.

IaaS Features

Below, we’ve outlined prominent IaaS features:

Scalable Compute

Most cloud providers offer access to resizable computing capacity in the form of virtual machines and dedicated servers. With some managed service providers, clients can commission and decommission computing resources based on workload demands through an intuitive self-service portal. This includes adjusting CPU cores, memory, and storage volumes for optimal performance and cost efficiency.

Storage

An IaaS provider may offer many different types of data storage to meet various needs — from high performance solid-state drives (SSDs) that can handle a high rate of reads and writes to cheaper object storage that can scale to store huge amounts of data like media files or backups.

IaaS hosting providers also support different methods for accessing the IaaS storage — file storage for shared files, block storage for fast databases, and archival storage for large backups or media libraries. Companies can choose the approach that best fits each application they run.

Moreover, there is advanced data protection where copies are stored across different physical data centres to prevent loss if one location fails. Copies can also be made across geographic regions to keep cloud-native applications running if one area has an outage.

The major IaaS providers have huge data centres connected by fast networks, enabling customers to scale capacity massively on demand.

Networking

Modern IaaS cloud providers offer a full suite of enterprise-grade networking resources that allow customers to deploy applications flexibly and connect them to their existing on-premises environments.

Clients can set up private, isolated virtual networks and customise them in detail. For example, assigning IP address ranges, configuring routing policies, connecting to gateways like VPNs, restricting access, and setting up DNS servers to resolve hostnames.

These virtual networks can have both private connections as well as public connections to the internet based on what is needed for the application architecture. Load balancing features help make applications resilient by distributing traffic across instances.

Operating Systems

A key feature of IaaS is rapid access to a wide array of up-to-date operating system (OS) images through a series of virtual machines. By leveraging OS images, clients can immediately provision ready-made environments for applications without time-intensive manual installations.

These images are continually patched, optimised, and hardened by IaaS engineering teams, ensuring the latest advanced security controls and capabilities are baked in over time. This allows clients to stay current and compliant without continually certifying new OS versions themselves.

Data Centres

Core IaaS infrastructure is hosted in world-class data centres spanning global regions and specific country legal jurisdictions if required. These facilities meet standards around physical access controls, fire protection, resilient power, optimised cooling, and structural protections.

By leveraging enterprise-grade data centres, clients gain access to underlying infrastructure resources under strict change control, providing stability for even the most latency-sensitive workloads.

Want to learn more about the features of IaaS cloud computing services specifically designed for Capital Markets and finance? Get in touch with us to enquire about our cloud computing and network analytics solutions at sales@beeksgroup.com.

Applications of IaaS

IaaS has been widely adopted across industries from retail and healthcare to the public sector and technology. However, financial services stand out for unlocking immense value from cloud infrastructure resources.

As an industry dealing with market volatility, enormous transaction volumes, and fast-paced innovation, IaaS gives financial organisations a flexible foundation to scale dynamically.

Below, we’ll look at a few use cases of how cloud infrastructure as a service has been used in the finance industry:

Public Cloud for Web Hosting

Many firms offering financial services use public cloud IaaS for hosting customer-facing websites and applications. The public cloud allows these digital platforms to scale seamlessly to accommodate spikes in traffic around market swings without capacity limitations.

Firms can also quickly roll out website updates globally through the cloud provider’s CDN without managing infrastructure directly.

Private IaaS Cloud for Regulation

Financial processes dealing with highly confidential data, like client portfolio management, may reside entirely in an IaaS private cloud or on-premises to satisfy regulatory requirements around data controls and access restrictions.

Private cloud IaaS provides physical isolation while leveraging automation, self-service access, and capacity efficiencies of cloud infrastructure management. This brings cloud-like benefits without regulatory uncertainty.

Hybrid Clouds for Key Systems

Some financial firms use a hybrid cloud approach to get the best of both private and public clouds. This balances security, control, and the ability to scale.

For example, a trading system might have its core servers in a private cloud data centre close to trading floors to minimise lag time. But it might send overflow trade volume to the public cloud when markets get volatile. This ensures good performance while handling spikes.

Another case is risk analysis software working mostly in a private cloud. This keeps proprietary data locked down. However, the data gets copied to the public cloud for safekeeping and disaster recovery.

Benefits of IaaS

IaaS has its advantages. One of the disadvantages of IaaS is that providers are not created equally, so the selection and vetting of your IaaS provider can be a challenging process. Let’s now look at the advantages of IaaS:

Cost Effective

A significant advantage of IaaS is that it’s cost-effective, as businesses only pay for the infrastructure utilised rather than owning and operating an on-premises data centre. This is referred to as a pay-as-you-go model. The pay-as-you-go model adjusts costs dynamically based on real usage rather than overprovisioning on-premises capacity that sits idle.

Increased Agility

IaaS enables fast deployment of compute resources through simple self-service portals. Enterprises can rapidly roll out new development environments to accelerate application development and testing without long hardware procurement delays. This agility facilitates a faster response to changing business demands.

Global Scale

The vast network of data centres a cloud service provider maintains offers nearly limitless capacity potential combined with connectivity across regions and continents. Built-in redundancy assurances and easy replication facilitate always-on application availability.

Shifted IT Resource Focus

With a cloud service provider managing data centre operations, patching, resiliency, backups and infrastructure upgrades, internal IT teams can devote more time to developing business applications and strategic initiatives rather than supporting their own infrastructure.

Disaster Recovery

Leveraging cloud data centres across isolated regions minimises the risk of failure due to localised outages from weather, natural disasters, or power disruptions. Backup capabilities facilitate quick restoration, while high-availability configurations guarantee application persistence.

Beeks provides IaaS-managed services for the financial services and capital markets industry. Contact our sales team at sales@beeksgroup.com to learn more about the IaaS benefits of our cloud service models or to assess the suitability of IaaS technology for your business.

Beeks: Global IaaS Services

Beeks has been a recognised IaaS cloud provider since 2011,  providing on demand access to infrastructure, connectivity, and analytics solutions tailored for capital markets and financial services firms.

With deep infrastructure expertise ranging from IaaS server provisioning and data security to exchange connectivity and financial data analytics, Beeks empowers clients in leveraging ready-built cloud infrastructure to achieve competitive advantages in trading speeds, connectivity, and market insights.

Beeks deliver a safe, scalable, self-service cloud platform, enabling rapid deployment of trading infrastructure.

Enhance your operations with Beeks by visiting our cloud services store. Contact us today — we specialize in bespoke network solutions. Our expert team designs strategies to address your challenges, from security enhancements to performance optimizations. With our comprehensive services, we turn your network into a robust asset, driving your business towards success. Partner with us for efficient, resilient network management best suited to your business needs.