IaaS allows users to rent the infrastructure itself: servers, data center space, and software. The biggest advantage of renting, as opposed to owning, infrastructure is that users can scale up the amount of space needed at any time.
Real life example: When you want to try out different car models, you go for car lease / car rent. Cloud example: Similarly IaaS is renting the infrastructure i.e. creating a virual server in the cloud environment
PaaS allows developers to create applications, collaborate on projects, and test application functionality without having to purchase or maintain infrastructure.
Real life example: On need of car ride without self driving and own car, you hire a taxi like Uber, OLA, etc. Similarly PaaS is hiring the readily available product platform i.e. Microsoft's fully managed Azure SQL Server.
SaaS is on the top of the stack because users interact primarily with software hosted on the cloud, and not the platform or infrastructure on which it runs.
Real life example: Sometimes, you want to use public transportation of shared cost without ownership of vehicle, driver. SaaS is leveraging the cloud software instantly i.e. Google's Mail software GMail
On premises (own data center) is similar to buy your own car with high capital cost and regular running cost. Owner has the complete operational responsibilities.
Simple and elegant examples to understand the need of Cloud model for your business.
