A cloud service model where the provider manages the underlying hardware (servers, storage, network) and the customer controls the operating system, middleware, and applications. Maximum flexibility, maximum customer responsibility.
In AZ-900: Azure Virtual Machines is IaaS. In CLF-C02: Amazon EC2. Key point: in IaaS the customer manages the OS while the provider manages the hardware. Distinguish it from PaaS, where the provider also manages the OS.
IaaS (Infrastructure as a Service) is a concept that can show up on the exam. Check the full guide to see it in context.