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cloud service provider (cloud provider)

By Wesley Chai

What is a cloud service provider?

A cloud service provider, or CSP, is a company that offers components of cloud computing -- typically, infrastructure as a service (IaaS), software as a service (SaaS) or platform as a service (PaaS).

Cloud service providers use their own data centers and compute resources to host cloud computing-based infrastructure and platform services for customer organizations. Cloud services typically are priced using various pay-as-you-go subscription models. Customers are charged only for resources they consume, such as the amount of time a service is used or the storage capacity or virtual machines used.

For SaaS products, cloud service providers may host and deliver their own managed services to users. Or they can act as a third party, hosting the app of an independent software vendor.

The most well-known cloud service platforms are Amazon Web Services (AWS), Google Cloud (formerly Google Cloud Platform or GCP) and Microsoft Azure.

What are the benefits and challenges of using a cloud service provider?

Using a cloud provider has benefits and challenges. Companies considering using these services should think about how these factors would affect their priorities and risk profile, for both the present and long term. Individual CSPs have their own strengths and weaknesses, which are worth considering.

Benefits

Challenges

Types of cloud service providers

Customers are purchasing an increasing variety of services from cloud service providers. As mentioned above, the three most common categories of cloud-based services are IaaS, SaaS and PaaS.

Cloud providers are also categorized by whether they deliver public cloud, private cloud or hybrid cloud services.

Common characteristics and services

In general, cloud service providers make their offerings available as an on-demand, self-provisioning purchase. Customers can pay for the cloud-based services on a subscription basis -- for example, under a monthly or quarterly billing structure.

Some cloud service providers differentiate themselves by tailoring their offerings to a vertical market's requirements. Their cloud-based services might deliver industry-specific functionality and tools or help users meet certain regulatory requirements. For instance, several healthcare cloud products let healthcare providers store, maintain, optimize and back up personal health information. Industry-specific cloud offerings encourage organizations to use multiple cloud service providers.

Major cloud service providers and offerings

The cloud services market has a range of providers, but AWS, Microsoft and Google are the established leaders in the public cloud market.

Amazon was the first major cloud provider, with the 2006 offering of Amazon Simple Storage Service. Since then, the growing cloud market has seen rapid development of Amazon's cloud platform, as well as Microsoft's Azure platform and Google Cloud. These three vendors continue to jockey for the lead on a variety of cloud fronts. The vendors are developing cloud-based services around emerging technologies, such as machine learning, artificial intelligence, containerization and Kubernetes.

Other major cloud service providers in the market include the following:

How to choose a cloud service provider

Organizations evaluating potential cloud partners should consider the following factors:

For more on cloud service providers and their offerings, check out our guide on the top public cloud providers.

04 Oct 2022

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