Cloud Service Provider

What Does Cloud Service Provider Mean?

A cloud service provider is an information technology (IT) company that provides its customers with computing resources over the internet and delivers them on-demand. CSPs are well-suited for organizations and individuals who don’t want the responsibility of installing software, hardware or network resources — and maintaining them until the end of their life cycles.


Cloud service providers are often categorized by the type of resource they provide:

Software as a service (SaaS) – This type of CSP provides customers with turnkey software apps that are accessed through a web browser or application program interface (API).

Infrastructure as a service (IaaS) – This type of CSP provides customers with access to APIs and other resources that facilitate the creation of a virtual data center capable of supporting workloads across multi-cloud environments.

Platform as a service (PaaS) – This type of CSP extends the capabilities of IaaS and SaaS by giving development teams access to libraries and other software tools that support building and hosting native cloud applications.

Techopedia Explains Cloud Service Provider

When determining which CSP to use, it’s important to think about what business problem the cloud provider’s services will help solve. Other considerations include the size of the company that’s purchasing cloud services, its current IT infrastructure and long-term business goals.

Importance of SLAs

A cloud service-level agreement (SLA) is a legal contract between a customer and a cloud service provider.

Before contract negotiations begin, it's important to conduct a cloud security audit and evaluate the provider’s security posture and adherence to the terms of the service-level agreement. Typically, a cloud SLA will include the following:

  • Service level options and associated costs.
  • A description of the cloud customer's responsibilities.
  • A description of the service provider's facility locations and policies regarding data sovereignty.
  • An explanation of how the provider addresses system access and data availability in respect to electronic discovery.
  • An explanation of how the provider assesses their own compliance with service level agreements.
  • A description of the cloud service provider’s obligations when the contract terminates.
  • A description of the customer's responsibilities upon termination of the SLA.

Choosing the Right CSP

Cloud service providers offer redundancy to ensure minimal downtime and faster recovery times in the event of a disruption. While this can reduce the cost of hiring, training and paying in-house IT staff, choosing the wrong provider can also introduce an additional layer of supply chain risk if the cloud provider's services integrates third-party apps but fails to provide customers with a software bill of materials (SBOM).

While cost always plays a big role in making a decision about which cloud service provider(s) to choose, it’s important to also look at the following considerations when evaluating SLAs and choosing the right provider:

Security and Compliance – The cloud provider should be able to demonstrate how it enforces security and privacy policies or be willing to undergo an independent evaluation.

Customization – The cloud service provider should explain how easy it is to customize services to meet customer requirements.

Data sovereignty – The cloud service provider should be transparent about where they store customer data and how they support relevant compliance regulations.

Storage architecture – The cloud service provider should make it clear how their storage architecture supports customer data in transit and at rest throughout the data's lifecycle.

Onboarding and offboarding – The service provider should be transparent about how easy it is to start using a specific cloud services and what's involved in terminating the SLA.

Manageability – The cloud service provider should be transparent about what orchestration tools are compatible with its services, what types of workflows it can automate and whether the provider's services can be integrated with other provider's services.

Reporting – The cloud service provider should make it easy for customers to calculate the total cost of using a provider's services.

Customer support – The cloud service provider should make it clear what type of customer support is available at each service level.

Examples of Cloud Service Providers

Popular examples of cloud service providers include:

  • Amazon Web Services (AWS)
  • Microsoft Azure
  • Google Cloud
  • Alibaba Cloud
  • IBM Cloud
  • Oracle
  • Salesforce
  • SAP
  • Rackspace Cloud
  • VMWare

Cloud Service Provider vs. Managed Service Provider

While some CSPs can also be considered to managed service providers (MSPs), not all MSPs are cloud service providers. The differentiator is that CSP offerings are always hosted off-premises and accessed through the internet.


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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.