Cloud Providers

What is a cloud service provider?

Top 3 cloud providers in 2024

Other cloud providers to consider

Cloud provider FAQs

Put simply, a cloud service provider (CSP) is a vendor that provides cloud computing services made available to customers via the internet. This encompasses apps and software to computing and networking hardware, and everything in between. 

With traditional on-premise solutions, companies are responsible for maintaining the underlying infrastructure on which their IT solutions run. By opting to use managed services that run in the cloud, ownership of the infrastructure is shifted from the organization to the CSP. 

There are many benefits to this model. On-demand scalability and flexibility are significant advantages, particularly to startups and fast-growing SMBs. Cloud solutions are often more cost-effective than on-prem as well, operating on a pay-as-you-go pricing model and eliminating expensive overheads associated with infrastructure maintenance.

Cloud service providers operate in a broad range of industries, including healthcare, e-commerce, entertainment, manufacturing, and education. Their solutions underpin a vast degree of technologies used today, from streaming services to national defense.

Types of cloud service providers

There are four primary types of cloud service provider which roughly align with how responsibilities are shared between the CSP and the end customer. 

• Infrastructure as a service

IaaS is effectively one step away from an on-premises solution. The CSP owns and maintains the hardware, which is essentially ‘rented out’ by the end customer who is responsible for all other aspects like operating systems, load balancing, scaling, and any software or data.

• Platform as a service

With PaaS, the CSP manages the infrastructure and hardware, but also the operating system and runtime — essentially delivering a ‘platform’ on which you can run your code. The customer is responsible for the applications and data, as well as the scaling.

• Function as a service

FaaS is much like PaaS, but the CSP is responsible for scaling. All the customer needs to worry about is their application code, and the cloud service provider takes care of provisioning resources according to usage. 

• Software as a service

In the SaaS model, customers pay for access to a full-stack application. Maintenance and management of the solution is handled by the CSP, from the underlying infrastructure to the software and code itself.

Cloud deployment models

There are multiple deployment models within cloud computing, including:

• Private cloud environments, also known as single-tenant environments. These are dedicated to a single organization, and are typically hosted in on-premise or third-party data centers. They allow a greater degree of configuration and optimization to meet business requirements, but with less on-demand scalability. Private cloud is sometimes used for use cases where security is especially critical. 
• Public cloud or multi-tenant environments are where cloud resources in CSP data centers are shared among multiple organizations. They’re highly scalable and cost efficient. 
• Hybrid cloud environments combine elements of private and public cloud services. Benefits include the security of private cloud, the scalability of public cloud, and enhanced disaster recovery through system redundancy.
• Multi-cloud is where a business leverages multiple CSPs for different things, such as AWS for infrastructure, GCP for machine learning and data management, and Azure for enterprise apps. Additional benefits include mitigation of service disruptions, reduced risk of vendor lock-in, and data center location diversity.

Despite the myriad cloud service providers in existence, the market is dominated by just three CPSs — Amazon Web Services, Microsoft Azure, and Google Cloud. These behemoths account for more than half of the total market share between them, and provide an extensive range of cloud offerings. 

Cost structures across the three providers vary in complexity, but are typically based on pay-as-you-go models and usage-based pricing. Here’s a look at each of the top 3 CSPs in more detail.

Amazon Web Services

Amazon Web Services, more commonly known as AWS, was the first major player in the cloud computing market. It holds roughly a third of CSP market share.

Its service offerings are the broadest of the three top cloud providers, with over 300 available solutions. AWS can solve for a wide variety of cloud use cases through services like computing power, virtual machines, cloud storage, networking, machine learning, automation, containerization, data analytics, and IoT. The full range of products is incredibly diverse, including more niche services in areas like blockchain, robotics, satellite, and even nascent fields such as quantum computing. 

Thanks to its maturity, AWS supports a vast ecosystem of third-party integrations. It offers many developer tools like AWS Lambda, AWS CloudFormation, and AWS CodePipeline. On top, AWS is the undisputed leader when it comes to physical cloud infrastructure. It has the most data centers of all CSPs with strong global coverage — ideal if your business requires data residency or low latency in specific geographies. 

Alongside pay-as-you-go pricing, AWS also offers Reserved Instances (RIs) which, in simple terms, offer a set amount of usage at a discounted price. For larger customers, particularly those with a history of AWS usage, Enterprise Discount Programs (EDPs) are also offered. These are essentially RIs but on a grander scale, with larger commitments and more opportunities to negotiate discounts.

Microsoft Azure

Microsoft Azure holds around 20–25% of global market share, making it the second largest CSP. It’s closely integrated with Microsoft’s software ecosystem, including products like Windows Server, Active Directory, and Office 365 — so if your business uses these tools already, Azure could be an attractive option. 

Much like AWS, Azure provides a vast range of products within areas like compute, analytics, content delivery network (CDN), containers, database services, DevOps, and cloud security. It also offers a number of mixed reality and computer vision solutions, previously leveraging the now-discontinued Kinect device that was originally developed for gaming. 

As for infrastructure, Azure’s global presence is significant, albeit not quite as extensive as that of AWS. On the other hand, it excels when it comes to hybrid cloud deployments, allowing organizations to integrate their on-prem infrastructure with cloud services.

Google Cloud

Google Cloud Platform (GCP) holds roughly a tenth of global CSP market share. While its platform is perfectly capable of handling the bread and butter of cloud use cases, GCP is better known for its strengths in big data and artificial intelligence. 

Available products include BigQuery for data warehousing and analysis, TensorFlow for machine learning, and Cloud Deployment Manager for infrastructure as code. Many of the technologies behind GCP’s solutions are open-source as well, such as Kubernetes for container orchestration.

In terms of infrastructure footprint, Google Cloud is the smallest of the three major CSPs. That said, it still maintains many strategically placed data centers and edge locations around the globe in order to provide low-latency services

Opting for one of the big three CSPs is often a safe bet for many businesses, but there are a multitude of alternative vendors worth considering. 

Here are some other top cloud service providers along with their respective areas of focus:

• Alibaba Cloud – The cloud computing arm of global e-commerce company Alibaba Group, this CSP has a strong presence in the Asia-Pacific region. Its suite of services includes high-performance compute, object storage, and CDN, and its portfolio is tailored towards e-commerce, big data, and AI. 

• VMware – This vendor is primarily known for its virtualization products, with a range of solutions for data centers and enterprise environments. There’s a strong focus on hybrid cloud environments through VMware Cloud on AWS. 

• Oracle Cloud – Oracle is well-known for its database, ERP, and CRM applications in the enterprise space. Its comprehensive Oracle Cloud platform includes IaaS, PaaS, and SaaS solutions. 

• SAP – Like Oracle, SAP’s strengths lie in ERP and CRM. The SAP Cloud Platform is a PaaS solution that enables developers to create custom apps and extensions that work with SAP’s services. 

• DigitalOcean – DigitalOcean primarily targets developers and SMBs, delivering cloud infrastructure with an emphasis on simplicity and ease of use. Straightforward pricing and user-friendly tools are two of its key advantages. 

• Salesforce – A leading provider of CRM software, this CSP also has its own PaaS solution, Salesforce Platform, which can be used to build and deploy applications and workloads on top of the Salesforce ecosystem. 

• IBM Cloud – IBM’s cloud computing platform provides a broad portfolio of services in line with the big three CSPs, including virtualization, containerization, and machine learning capabilities. It has strong support for hybrid and multi-cloud environments too.
• Tencent Cloud – Part of Tencent Holdings, one of the largest technology conglomerates in China, Tencent Cloud offers a wide range of services including compute, storage, networking, databases, and artificial intelligence. Its strengths include big data analytics and IoT, as well as gaming-related services.