Skip to content

Strategic Business Leader · Enabling success: disruptive technologies

Cloud Computing for ACCA Strategic Business Leader: IaaS, PaaS and SaaS

Updated 11 October 2026 · Fact-checked

Cloud computing means using computing resources such as servers, storage and software over the internet, usually on a pay-as-you-use basis, instead of owning them. You solve exam questions by naming the right service model (IaaS, PaaS, SaaS) and deployment model, then weighing benefits and risks against the scenario.

Understand Cloud Computing

Cloud computing is the delivery of IT resources over the internet from a provider's data centres. The organisation does not buy and run its own servers. It rents capacity and pays for what it uses. Think of it like renting a flat instead of buying one.

There are three service models. They differ in how much the provider manages for you.

  • IaaS (Infrastructure as a Service): the provider supplies servers, storage and networking. You manage the operating system, applications and data. You get the most control.
  • PaaS (Platform as a Service): the provider also supplies the operating system and development tools. You build and run your own applications and manage them and the data.
  • SaaS (Software as a Service): the provider runs the whole application. You log in and use it, for example online accounting or email. You get the least control and the least work.

There are also deployment models. A public cloud is shared by many customers and owned by the provider. A private cloud is used by one organisation, either on its own site or hosted for it. A hybrid cloud mixes public and private and lets data or workloads move between them. A community cloud is shared by a group with common needs, such as several public bodies.

The main benefits are lower upfront capital spend (costs move from capital to operating expenditure), scalability up and down as demand changes, faster deployment, access from anywhere, and automatic updates and often stronger security than a small firm could afford. The main risks are data security and privacy, dependence on the provider (lock-in and outages), loss of control, internet reliance, regulatory issues where data is stored in other countries, and ongoing subscription costs that can rise.

In SBL the examiner wants judgement, not a definition. A good answer links the model and its pros and cons to the organisation's size, industry, data sensitivity and strategy.

How to solve Cloud Computing questions

Use this method for any cloud question, whether it asks you to explain, advise or evaluate.

  1. 1Read the requirement and note the verb: explain, evaluate, recommend or advise. It sets how deep and how balanced you must be.
  2. 2Pick out scenario facts that matter: size, growth, seasonal demand, sensitive data, countries of operation, IT skills, budget and existing systems.
  3. 3Identify the service model that fits (IaaS, PaaS or SaaS) and the deployment model (public, private, hybrid). Define each in one line.
  4. 4List benefits that fit this organisation, each tied to a scenario fact, such as scalability for seasonal sales.
  5. 5List risks that fit this organisation, each tied to a scenario fact, such as customer data held offshore.
  6. 6Suggest practical controls: due diligence on the provider, service level agreements, encryption, backups, exit plans and keeping sensitive data private.
  7. 7Finish with a clear conclusion or recommendation that answers the requirement and shows commercial judgement.

Quickest way: Model, fit, balance, decide

When to use it: Use this when time is short, for example a 10 to 12 mark requirement in a case.

  1. Write the service and deployment model in one line each.
  2. Give two or three benefits, each linked to a scenario fact.
  3. Give two or three risks, each linked to a scenario fact, with one control each.
  4. Write a one or two sentence recommendation. Say what you would do and why.

Common mistakes in Cloud Computing

  • Writing a textbook definition of IaaS, PaaS and SaaS with no link to the scenario.

    Students memorise the models and treat the question as a knowledge test.

    Fix: Use the definition in one line, then spend most of your answer applying it to the organisation's facts.

  • Listing only benefits or only risks.

    Cloud is often seen as simply good, or the risk side is rushed.

    Fix: Give both sides unless told otherwise, and end with a judgement on which side outweighs the other for this organisation.

  • Mixing up the service models, for example calling email software IaaS.

    The three names sound alike and the dividing line is about who manages what.

    Fix: Ask who manages the application. If the provider runs it all, it is SaaS. If you build on their platform, PaaS. If you only rent hardware, IaaS.

  • Saying cloud is always cheaper.

    Students focus on lower capital spend and forget subscriptions and migration costs.

    Fix: Say costs shift from capital to operating spend. Long-term cost depends on usage, and migration, training and data transfer cost money.

  • Saying cloud is insecure, or that the provider is fully responsible for security.

    Both views are common and both are too simple.

    Fix: Say security is shared. The provider secures its infrastructure, but the customer stays responsible for its data, access controls and legal compliance.

  • Giving generic points with no recommendation or professional skills.

    Students run out of time and stop after the lists.

    Fix: Always close with a reasoned recommendation in the format asked, such as a short report or memo, showing analysis and commercial acumen.

Worked examples

Example 1

A retailer has heavy online sales in two peak months each year. Its own servers are underused for the rest of the year. The board is considering moving its e-commerce platform to the cloud. Explain the benefits and risks to the board. (10 marks)

Show the solution
  1. Model: infrastructure for the website could be rented as IaaS, or the retailer could use a PaaS or SaaS e-commerce platform. A public or hybrid cloud suits variable demand.
  2. Benefit 1: scalability. The retailer can add capacity in peak months and release it after, so it pays only for what it uses instead of owning idle servers.
  3. Benefit 2: cost structure. Capital spend on servers falls and costs become operating expenses that vary with demand.
  4. Benefit 3: speed and resilience. New capacity can be set up quickly and the provider's data centres usually give good availability.
  5. Risk 1: security and privacy. Customer and payment data would sit with a third party. A breach would harm reputation and could bring regulatory penalties.
  6. Risk 2: dependence on the provider. An outage in a peak month would stop sales, and moving away later could be hard and costly.
  7. Risk 3: internet reliance and control. Performance depends on connectivity, and the retailer has less control over upgrades and maintenance.
  8. Controls: check the provider's security and certifications, agree a service level agreement with uptime and compensation terms, encrypt data, keep backups, and plan an exit route.
  9. Conclusion: the benefits are strong because demand is seasonal, so adoption is sensible if the risks are managed through contract and controls.

Answer: Cloud adoption suits the retailer because scalability and variable cost match its seasonal demand. Key risks are data security, provider dependence and outages in peak months. These should be managed through due diligence, a strong service level agreement, encryption, backups and an exit plan.

Example 2

A small accountancy firm uses its own server for email and accounting software. It is considering a move to a provider that hosts and runs the accounting application and charges a monthly fee per user. Identify the service model and advise the partners on whether to proceed. (8 marks)

Show the solution
  1. Identify the model: the provider hosts and runs the whole application, and users only log in. This is SaaS.
  2. Compare with the alternatives briefly: IaaS would only supply hardware and PaaS would give a platform to build on. Neither fits a firm that wants a ready-made package.
  3. Benefit 1: lower upfront cost and no server to buy, maintain or replace. The firm pays a predictable monthly fee.
  4. Benefit 2: little IT effort. The provider handles updates, backups and maintenance, which suits a firm with limited IT skills.
  5. Benefit 3: flexibility and remote access. Staff can work from client sites or home, and users can be added or removed as the firm changes.
  6. Risk 1: client confidentiality. Client financial data would be held by a third party, and the firm must meet its duty of confidentiality and data protection law.
  7. Risk 2: lock-in and limited customisation. Moving data later may be hard, and the firm must accept the provider's features.
  8. Risk 3: ongoing fees and connectivity. Subscriptions continue and could rise, and poor internet access stops work.
  9. Recommendation: proceed, provided the firm checks the provider's security and data location, agrees service levels and data return terms, and trains staff.

Answer: The model is SaaS. It suits a small firm with limited IT skills because it cuts upfront cost and support effort. The partners should proceed only after checking confidentiality, data location, service levels and exit terms.

Exam tips

  • Link every point to a scenario fact. Generic cloud points earn few marks, and the case gives you the facts to use.
  • Be ready to recommend a model. Match IaaS, PaaS or SaaS and public, private or hybrid to the organisation's needs and data sensitivity.
  • Give a balanced answer with a conclusion. Professional skills marks reward judgement and a clear recommendation.
  • Mention governance and risk controls, such as due diligence, service level agreements and board oversight, since cloud links to risk and IT control topics.
  • Use the format asked, such as a report or briefing note, and keep paragraphs short and structured.

Practice questions from Enabling success: disruptive technologies

Cloud Computing in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Cloud Computing: frequently asked questions

What is the difference between IaaS, PaaS and SaaS?

They differ in how much the provider manages. IaaS gives you infrastructure such as servers and storage. PaaS adds a platform for building applications. SaaS gives you a finished application to use.

What are the main benefits and risks of cloud computing for a business?

Benefits include lower upfront cost, scalability, fast deployment and remote access. Risks include data security and privacy, provider dependence, outages, loss of control and compliance issues. A good answer ties each point to the scenario.

What is the difference between public, private and hybrid cloud?

A public cloud is shared by many customers and run by the provider. A private cloud is used by one organisation. A hybrid cloud combines both, so sensitive data can stay private while other workloads use public capacity.

How is cloud computing examined in SBL?

It usually appears as part of a task on technology, risk or strategy in the case study. You are asked to evaluate, advise or recommend, so you must apply the models, benefits and risks to the organisation and reach a conclusion.