Infrastructure as a Service is a form of hosting. It includes network access, routing services and storage. The IaaS provider will generally provide the hardware and administrative services needed to store applications and a platform for running applications. Scaling of bandwidth, memory and storage are generally included, and vendors compete on the performance and pricing offered on their dynamic services.
IaaS can be purchased with either a contract or on a pay-as-you-go basis. However, most buyers consider the key benefit of IaaS to be the flexibility of the pricing, since you should only need to pay for the resources that your application delivery requires.