The acronym 'PaaS' stands for Platform as a Service in cloud computing. PaaS provides developers with a platform that includes tools, services, and infrastructure to build, deploy, and manage applications without needing to manage the underlying hardware or software components directly. This enables teams to focus on writing code and developing applications efficiently, while the PaaS provider handles maintenance, scalability, and security. PaaS is particularly beneficial for developing web applications, as it offers a streamlined environment for collaboration and innovation.