IaaS stands for Infrastructure-as-a-Service that enables users to provision a
virtual machine on demand. A VM can include software stack, such as LAMP, or can be bare system with an operating system installed. Here, end-user is responsible for managing the resources on the machine.
PaaS stands for
Platform-as-a-Service that uses software to emulate the architecture, taking abstraction higher. Here, a platform hosts an application and machines to cater to the needs of dynamic businesses. Here, users need not to worry about CPU or memory utilization as everything is taken care at providers end.