Cloud computing offers three primary service models: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Users can take infrastructure (virtual machines, storage), platforms (development/deployment environments), or applications as services - not just applications. For example, AWS EC2 provides IaaS, Google App Engine provides PaaS, and Office 365 provides SaaS. The statement 'only applications as service' is incorrect.