“Move to the cloud” is one of those phrases that gets thrown around in sales meetings and never actually defined. Depending on the speaker it means renting servers, switching to Gmail, or signing up for Salesforce. Those are three very different decisions with three very different price tags. This post pulls them apart for owners who are tired of nodding along.
The three layers, in plain English
Everything called “cloud” falls into one of three buckets, in roughly increasing order of how much you have to manage:
| Layer | What you rent | What you manage | Examples |
|---|---|---|---|
| SaaS (Software as a Service) |
A finished app | Just your data and users | Google Workspace, QuickBooks Online, Slack |
| PaaS (Platform as a Service) |
A runtime to deploy your code into | The code itself; the platform handles the rest | Vercel, Fly.io, Cloudflare Workers, Heroku |
| IaaS (Infrastructure as a Service) |
A raw Linux box on the internet | The OS, the stack, everything on top | DigitalOcean Droplets, AWS EC2, Hetzner |
Most small businesses end up using a mix. A couple of SaaS products (email, accounting, payroll), maybe a PaaS for a custom app, and one or two IaaS servers for things SaaS doesn’t cover well.
Which layer do you actually need?
- If you need an off-the-shelf tool (CRM, email, accounting, project management) pick SaaS. Don’t build it. The math almost never works.
- If you have a custom app and don’t want to manage a server, pick PaaS. You give them code; they give you a URL. The trade-off is cost above a certain scale and lock-in to their platform.
- If you need to host an open-source app (WordPress, FusionInvoice, Nextcloud), need fine control, or want predictable monthly cost, pick IaaS. A $6 DigitalOcean Droplet runs most small-business workloads. (More on that in what I actually put small businesses on.)
Where the hidden costs live
The marketing for all three layers focuses on the obvious sticker price. The bills that actually surprise people are:
- Egress. Most clouds charge you to send data out. AWS, GCP, and Azure all do. DigitalOcean and Hetzner are notably more generous here. For a content-heavy site, this can dominate your bill.
- Per-user SaaS pricing. A $15/user/month tool with 20 employees is $3,600/year. Audit your SaaS subscriptions annually; you’ll find seats you’re paying for and not using.
- PaaS scaling. The convenience that makes PaaS great becomes expensive once you’re past their free tier. Always know what the next pricing tier costs before you grow into it.
- Compliance add-ons. SOC 2 reporting, HIPAA BAAs, dedicated tenancy. These are line items on top of the base price on every cloud. If you don’t need them, you’re not missing anything.
The boring truth
For most small businesses, the right answer is: a handful of well-chosen SaaS subscriptions, plus a small IaaS server for the one or two things you self-host. You don’t need a multi-cloud strategy. You don’t need Kubernetes. You probably don’t need PaaS unless you have a custom app and a developer on staff.
If you want a hand sorting out what your stack should look like, drop me a line. The first conversation usually saves more than the last bill did.