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    A cloud service provider (CSP) is an information technology (IT) services vendor that allows clients to manage applications and data in a cloud environment. More specifically, they provide applications, storage services, platforms, and/or hosting services via a cloud-based infrastructure. Read on to learn what cloud service providers do and what they offer to their enterprise customers.

    What Is a Cloud Service Provider?

    A CSP is a vendor that offers customers a variety of cloud managed services, including infrastructure as a service, platform as a service, and software as a service options. These services are delivered via public, private, or hybrid clouds.

    What Do Cloud Service Providers Do?

    A cloud service provider sells cloud computing power and storage space in a pay-as-you-go manner. The CSP takes care of every piece of technical infrastructure enterprises need to get their cloud platform running. This can range from providing hardware like servers and storage to managing an entire data center to picking out systems like firewalls or load balancers

    The goal of a CSP is to provide all these services in one place so companies don’t have to worry about maintaining them on their own. Customers pay only for what they use.

    Cloud service providers typically offer their customers: 

    • A pool of IT resources from which they can select as needed. 
    • An interface to access those resources. 
    • A payment portal
    • Support services

    Since buying servers upfront is unnecessary when working with a CSP, companies can save money when compared to the cost of setting up a private data center. CSPs offer companies increased flexibility since they can increase their capacity quickly by adding more instances if demand increases. 

    Similarly, the CSP can turn off unused servers if business slows down; IT teams no longer have to spend all of their time configuring and maintaining servers. Instead, they can focus on developing new features for their business applications.

    What Are the Benefits of Working with a Cloud Service Provider?

    A cloud service provider does everything necessary to build and maintain enterprise custom IT infrastructure. These are some of the main benefits they offer their customers:

    Pay-as-you-go pricing

    The most obvious benefit of using a CSP is its pricing model. Rather than paying upfront for expensive enterprise solutions, companies can pay as they go without committing to long-term contracts. 


    An additional benefit of outsourcing IT services is enhanced security. Because cloud service providers manage all aspects of information technology, companies don’t need to worry as much about protecting their systems from hackers or other threats. 

    Managed data migration

    When enterprises move data between in-house servers and public clouds, they risk disrupting business operations. With managed data migration, companies work with a CSP to ensure seamless transfers without downtime. 


    Companies can scale up their storage space or bandwidth at any time without purchasing new equipment or hiring more employees. They just need to contact their provider and ask for more resources when the need arises. 

    24/7 support

    Most companies won’t experience issues with their IT infrastructure overnight, but even so, it’s nice to know there are experts available around-the-clock if something goes wrong. 

    Additional business solutions

    Some CSPs offer other business solutions besides hosting and data management tools. For example, some partners provide marketing automation tools that allow businesses to target customers based on demographic information or past purchases. 

    Better customer experience

    As part of an integrated solution with managed hosting and content delivery network (CDN) services, many CSPs provide end users faster access to online content via CDN hosted worldwide. This speeds up load times and improves customer satisfaction. 

    Comprehensive reporting

    CSPs often provide real-time usage reports, allowing businesses to track how much they spend each month and where they can optimize expenses. 

    What Are the Challenges of Working with a Cloud Service Provider?

    CSPs can offer businesses many benefits and cost-saving opportunities for cloud computing. However, some risks are involved, and users should know what they are getting into before working with a CSP:

    Cloud security

    The cloud brings many benefits in terms of scalability, flexibility, and affordability, but it also raises security concerns. Enterprise data is stored on third-party servers, and if there’s a breach, there is an increased risk of exposing sensitive information. 

    Vendor lock-in

    When an enterprise outsources certain functions to another company, they may be locked into their products or services without any alternatives available should something go wrong with the vendor. Many enterprises worry about vendor lock-in when using public clouds; they prefer more open platforms so they can easily switch between vendors without having to rewrite code or retrain employees.

    Hidden costs

    Enterprises may incur additional hidden costs that are not included in the basic subscription price and pay more than expected.

    ​​Data migration

    Due to complex processes and data migration, enterprises may experience difficulties moving from on-premises infrastructure to a public cloud environment. Data migration can be a difficult process that requires substantial resources in terms of time and money. This is especially true for companies with massive amounts of data, as it can take significant time to transfer large volumes of information across platforms.

    Performance and outages

    Some companies choose not to use virtual servers and instead rely on physical hardware due to performance issues that can happen with virtual servers. Outages with virtual servers can render business data inaccessible and lead to lost revenue.

    Types of Cloud Service Providers

    Infrastructure as a service (IaaS) provider 

    IaaS offers businesses access to servers, storage, and networking tools in a pay-as-you-go model. With IaaS, companies can tap into scalable computing resources hosted by their provider of choice. This means they no longer have to purchase hardware or software licenses for these items—they simply lease them from an IaaS provider on an as-needed basis. 

    Platform as a service (PaaS) provider

    PaaS provides an operating system with tools preinstalled for developers to create applications quickly and easily. Tools might include testing software, management software, analytics programs, user interfaces, or anything that makes development easier. 

    The PaaS provider’s primary function is to ensure systems security for hosting applications and data. They also oversee security within an enterprise application, ensuring its long-term stability and smooth performance. 

    Software as a service (SaaS) provider

    Cloud SaaS providers offer software via a cloud computing environment. SaaS providers are an attractive option for small businesses because they provide access to enterprise-level software without requiring customers to buy and maintain their hardware. 

    SaaS offers business apps such as accounting packages, email services, and CRM software. Users access these apps through a web browser instead of downloading them onto their computers. 

    How to Select the Right Cloud Service Provider 

    A bad CSP can sink a business, so it’s important to choose one carefully. When evaluating potential options, keep these factors in mind.

    • Cost: Cost is a significant reason for choosing a cloud service due to its pay-as-you-go, scalable pricing model. Consider your budget and the cost of the specific features you need before selecting a provider.
    • Reputation: Reputation matters when selecting a cloud service provider. An enterprise needs to choose a trusted partner with a solid, years-long track record.
    • Security: Security considerations are crucial when choosing a CSP because all enterprise data is stored on their servers. It’s important to learn how different CSPs secure and back up this data.
    • Features: Unique features offered by a CSP play an important role in determining which one would work best for an enterprise. There are several features that businesses should look for, including data centers, disaster recovery services, compliance tools, load balancing, and network security. 
    • Support: Many CSPs offer 24/7/365 customer support. Take a closer look at providers to see what this kind of access means. Is there phone and email access or chat and live webinars? Even social media channels like Twitter and Facebook can quickly answer simple questions.

    Top Cloud Service Providers

    The best providers offer high-quality, competitively priced products and services on demand. Here are some of today’s top cloud service providers.

    Amazon Web Services (AWS)

    AWS Logo

    Amazon Web Services is an online service that provides on-demand cloud computing platforms. AWS’s most popular platform is EC2, or Elastic Compute Cloud. EC2 allows users to rent server space in Amazon’s data centers and run their applications and servers on a pay-as-you-go basis.

    Other services include S3 (Simple Storage Service), which stores files; RDS (Relational Database Service), which hosts databases; SQS (Simple Queue Service), which handles messaging; and many more.

    Some of its features include data encryption, virtual private clouds (VPCs), identity and access management (IAM), elastic load balancing (ELB), and auto-scaling.


    • AWS is user-friendly and designed for quick and secure access. 
    • A quick setup process can deploy applications on the platform within minutes.
    • The platform provides comprehensive tools and capabilities for databases, software, mobile, analytics, and networking.


    • Billing can get complicated for small companies.
    • Limitations with EC2; access to resources depends on the enterprise region.

    Microsoft Azure

    Microsoft Azure Logo

    Microsoft Azure is a set of cloud computing services that includes compute, database, mobile, networking, analytics, and application services. Cloud computing services are hosted within Microsoft data centers (known as regions) spread across many different geographic locations worldwide. 

    Azure features PaaS and IaaS layers for developers and IT professionals to build, deploy, and manage applications across a global network of Microsoft-managed data centers. In addition to its core IaaS, PaaS, and SaaS services, Azure offers many other complementary services such as Active Directory management tools, virtual networking capabilities, and management software for SQL Server databases.


    • Microsoft Azure cloud offers high availability and 99.95% service level agreement (SLA).
    • It strongly emphasizes security, adhering to the standard security architecture of detect, assess, diagnose, stabilize, and close.
    • Azure enables companies to manage large, complex applications using desired tools such as BASH, PowerShell, and REST APIs.


    • The platform can quickly get overly complicated for users.
    • It requires management and expertise to use efficiently.
    • If not properly managed, it might become rather expensive.

    Google Cloud

    Google Cloud Logo

    The Google Cloud Platform (GCP) is a suite of cloud computing services with integrated systems and platforms that process data and deliver applications. The platform includes analytics, storage, messaging, and security services delivered over a global network of Google-managed data centers. 

    Key features of Google Cloud include resource pooling, API management, load balancing, auto-scaling, container support, and integration with other GCP products. 


    • It is easy to integrate with other Google Cloud Services.
    • It includes robust data analytics and storage.
    • It fosters easy collaboration with well-integrated tools.


    • GCP has fewer global data centers than AWS and Azure.
    • Its pricing can get complicated.
    • It is a complex migration process when switching to another vendor.

    Not sure if the three largest cloud service providers are right for you? Learn about other Top Cloud Computing Companies here.