Cloud computing emerged in 2002 when Amazon needed a more efficient way to expand its e-commerce marketplace. Unsurprisingly, the company’s cloud services subsidiary, Amazon Web Services (AWS), launched in 2006 and is now the largest Cloud Service Provider (CSP).
This guide will cover the cloud computing solutions market, its dominant players, and more.
Table of Contents:
What is a cloud service provider
A cloud computing services provider (CSP) rents technology, infrastructure, and expertise to enable cloud computing for companies and individuals. This includes online storage, computing power, and networking over the internet.
CSPs own and operate data centers worldwide that house the physical infrastructure required for cloud vendors, such as servers, hard drives, and cooling systems. Anyone can access this infrastructure by connecting to these data centers and purchasing capacity on a pay-as-you-go basis.
Why use a CSP instead of building on-premises
Companies often avoid building their own cloud based services due to high costs, specialized expertise requirements, and constant maintenance. Many prefer not to manage these complexities, especially when using a robust cloud service provider offers significant advantages, including:
- Low capital outlay: Customers avoid large upfront infrastructure costs (CAPEX) by paying a low, ongoing fee based on usage.
- Faster time-to-market: Businesses can launch products and services more quickly, bypassing the need to purchase, install, test, and optimize cloud infrastructure services.
- Agility: CSPs allow cloud-based brands to adapt quickly. They can explore new markets or business lines without selling existing infrastructure or buying updated systems.
- Comprehensive cloud services: CSPs offer Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), Software-as-a-Service (SaaS), and Serverless Computing.
- Flexible cloud delivery models: Businesses can choose from public, private, hybrid, and multi-cloud services.
- Pay-as-you-go pricing: You only pay for the cloud resources you use, with no upfront payments, provisioning, or long-term contracts.
- Managed services: CSPs offer varying degrees of control over rented infrastructure, which can be fully managed by the CSP or configured by your engineers.
- Disaster recovery: A CSP can back up your data across multiple global regions, enabling retrieval in case of a data center failure or issues with your on-premises system.
CSPs also handle the testing, updating, security, and optimization of cloud service providers infrastructure and its support services. This frees up your time, money, and effort to focus on other business priorities. However, the cloud model does present its own challenges.
Challenges of using a cloud service provider
The main challenges when using cloud service providers (CSPs) are:
Data confidentiality
Public clouds rely on a network of remote, shared, third-party servers to process, store, and manage data. This differs from local storage, such as an on-premises data center, which a single customer owns and controls. Businesses often worry about securing sensitive business secrets, customer data, and compliance information in this shared environment.
Data security
Best cloud service providers implement advanced security tools and encryption mechanisms to protect sensitive information. However, even with such measures, CSPs are not immune to attacks. If hackers compromise a CSP’s systems, customer data can be exposed, leading to reputational damage, lost customers, and legal action.
Infrastructure control Limitations
Some companies prefer more control over the backend infrastructure to optimize their cloud service provider performance. The level of control available varies significantly between CSPs.
Vendor lock-in
Relying too heavily on a single CSP can be problematic. If a CSP changes its pricing or implements other unfavorable policies, migrating applications to different cloud providers can be costly and complex.
To address these challenges, many companies now adopt a multi-cloud strategy.
Multi-cloud strategy: using multiple cloud providers
A multi-cloud strategy involves running workloads across two or more cloud computing providers. This approach is popular among companies seeking flexibility, reduced risk, and a way to avoid vendor lock-in.
Instead of depending on one provider, businesses distribute their services—for example, using AWS for compute, Azure for machine learning, and GCP for data analytics. This strategy helps optimize performance, availability, and cost across different regions and platforms.
Multi-cloud also enhances resilience. If one provider experiences an outage, others can keep services running. With the right setup, you can optimize each workload for the provider that best handles it.
Most CSPs now support multi-cloud environments. Tools such as Azure Arc, Google Anthos, AWS Outposts, and cost visibility platforms help teams monitor and manage cross-cloud deployments.
Despite the growing adoption of multi-cloud strategies, three cloud giants still dominate the global market with their cloud solutions for business.
Top cloud service providers
The following cloud providers power some of the world’s most innovative companies.
1. Amazon Web Services (AWS) – Infrastructure-as-a-Service (IaaS)
Amazon Web Services (AWS) offers over 200 cloud computing services. It’s best known for its IaaS offerings, including Amazon EC2 for computing, Amazon S3 for storage, and Amazon RDS for databases. With over 100 Availability Zones across 31 regions, AWS holds over 34% of the global cloud market share. While known for its public cloud, AWS also supports on-premises, private, hybrid, and multi-cloud deployments.
2. Microsoft Azure – Hybrid and Enterprise Cloud Services
Microsoft Azure offers AWS-like services through its network of over 116 Availability Zones. It provides over 200 cloud infrastructure services, including IaaS, PaaS, SaaS, Edge, and Serverless computing. Launched in 2010, Azure has grown its market share to 23% by targeting enterprises, hybrid cloud users, and companies that use Microsoft products like Office 365.
3. Google Cloud Platform (GCP) – AI, ML, and Kubernetes
Google Cloud Platform (GCP) offers services similar to AWS and Azure but has carved out a niche in Artificial Intelligence (AI), Machine Learning (ML), Data Analytics, and Kubernetes. GCP is popular with smaller companies that use Google services like Workspace (Docs, Gmail, etc.), Drive, and YouTube.
4. Alibaba Cloud – Largest CSP in Asia
For businesses operating in Southeast Asia, Alibaba Cloud is a top choice. Evolving from Alibaba’s e-commerce business, it has captured about 5% of the global cloud computing solutions market since its launch in 2009. Alibaba Cloud serves enterprises, SMEs, governments, and non-profits.
5. IBM Cloud – Multi-cloud CSP
IBM Cloud helps businesses transition to digital platforms while maintaining a familiar on-premises feel. Holding about 4% of the market, IBM offers over 170 products for on-premises, hybrid, and multi-cloud deployments. Like its larger competitors, IBM also focuses on managed IaaS and cloud based services.
6. DigitalOcean – Cloud Tools for SMBs and Developers
DigitalOcean provides a platform for developers to deploy and scale projects across multiple computers. As the third-largest hosting company worldwide, its main offerings are computing and storage. DigitalOcean focuses on IaaS for small and medium-sized businesses with a pay-as-you-go model.
7. Salesforce – Cloud-Hosted Services
Salesforce pioneered the modern Software-as-a-Service (SaaS) model in the late 1990s. Today, it offers various cloud computing providers applications for marketing, sales, analytics, and e-commerce. These services also power its well-known Customer Relationship Management (CRM) suite.
8. Tencent Cloud
Tencent Cloud provides a range of services, from virtual machines to file storage. While a major player in China, the CSP operates in 26 regions with over 70 Availability Zones across Asia, Oceania, Europe, and the Americas.
9. Oracle Cloud Infrastructure (OCI) – All-around CSP with a Focus on Databases
Oracle was the first vendor to offer IaaS, PaaS, and SaaS models on a single platform. OCI provides a range of cloud computing services, including on-premises, hybrid, public, and multi-cloud solutions like the Oracle Database Service for Microsoft Azure. OCI is available globally and uses a pay-as-you-go pricing model.
10. Huawei Cloud – Going Global
After securing 18% of the Chinese cloud solutions for business market, Huawei plans to offer a wide range of cloud vendors services in 170 countries. This global expansion makes Huawei Cloud a strong contender for the future.