As with most vague generalizations, the idea that Infrastructure as a Service offerings are not for small and medium enterprises is bogus. The argument goes like this: SMEs lack the expertise and experience to make the most of low-level cloud offerings like IaaS, and so the tendency is for SME cloud investments to be focused on SaaS offerings where the solutions are already built for them.
While it's certainly true that many SMEs prefer to use use SaaS for some applications, often related to the productivity and collaboration software that they would have previously run on desktop hardware, to claim that SMEs have no need to IaaS is tantamount to claiming that they don't need general IT infrastructure at all.
Of course, SMEs focused on providing web services and applications are more than likely to choose to build on IaaS, as are business that have a requirement for significant processing power, like those in the media or bioinformatics industries. But, IaaS is also hugely useful for those in more traditional spheres. The sort of businesses that keep their IT hardware in a closet or have a few servers colocated are just as likely to find IaaS useful as any other business.
Periodic Hardware Utilization
Many smaller businesses require computational resource periodically. Whether it's for processing payroll, batch record processing, data analytics processing, or a more specific application, infrastructure as a service platforms allow smaller companies to take advantage of enterprise grade technology without having to invest significant capital in hardware that would be idle for most of the month.
Maintaining IT infrastructure can be a significant drain on the resources of SMEs, and, quite frankly, it isn't the core competence of most. Buying, deploying, and managing servers and networks is complex, expensive, and it can be insecure. IaaS infrastructure allows companies to take advantage of the skills of cloud vendor's highly-trained system administrators and network engineers without the overhead of having to manage infrastructure in-house.
Data security is a complex undertaking, especially for those businesses that fall under strict regulatory frameworks because they handle private data. Cloud vendors are, of necessity, experts in data security and privacy. So, although it may seem counterintuitive to some, moving data away from local storage and into the cloud is likely to considerably reduce the risk of data loss or theft.
The days of small and medium companies building their own IT infrastructure are numbered. In much the same way that they don't generate their own electricity or drill for the oil they use, business will view computing and storage resources as a utility.