What is a cloud service provider?

Cloud service providers (CSP) provide cloud-based network, application, platform, or storage services to businesses—usually in a pay-as-you-go model.

CSP services encompass essentially any service centered in the cloud and accessed remotely by paying clients. Typically, these services fall into one of three categories: infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS).


In an IaaS solution, the CSP provides access to necessary servers, networks, virtualization, operating systems, data storage, and data management. When paying for access to cloud-based infrastructure, customers enjoy increased flexibility and more comprehensive cloud solutions. However, the customers are responsible for managing applications, data, runtime, and middleware, and for taking care of any necessary updates and responding to unexpected software issues.

IaaS is essentially a self-service model; users can defer the expenses of purchasing and maintaining hardware, while providing their own software to run on it.

SaaS vs PaaS vs IaaS


While IaaS requires users to supply their own applications, PaaS provides the tools that businesses can use to create and deploy applications, making development, testing, and deployment of applications a simple, cost-effective process. PaaS may incorporate operating systems, middleware, and runtime environments. The apps developed using IaaS solutions also generally inherit valuable cloud characteristics, including availability, scalability, and multi-tenancy. PaaS also handles essential hardware and other infrastructure-related assets, and manages the scaling needed to match cloud resources to a business' changing needs.

With PaaS, users can better address their need for custom applications, reducing the need for coding expertise and helping to automate important processes.


Representing the largest—and fastest growing—cloud market, SaaS is a step up from PaaS in terms of complete service. SaaS manages nearly every responsibility associated with cloud computing. SaaS cloud service providers handle the hardware, operating systems, virtualization, scaling, and functions, and provide ready-to-use software applications designed to fill specific business functions. While some SaaS solutions require specific plug-ins, most can be accessed directly through any standard web browser.

SaaS allows businesses to take full advantage of the cloud, maintaining only minimal resources on site.

There are many advantages to working with a CSP. The most obvious benefit may be the reduced need for onsite hardware installation, maintenance, repair, and replacement/upgrading. By outsourcing hardware needs to third parties, organizations can reallocate resources and personnel away from related hardware and housekeeping tasks and employ them towards other essential processes. But there are other, more-specific advantages to consider as well.

Cloud Service Provider Benefits

Reduced costs

There are certainly costs associated with working with a cloud service provider, and the more services being used, the higher the price. That said, in most cases the costs of outsourcing cloud services are less than the cost of hiring, training, and supporting a full-time, inhouse IT department and all the related hardware and software (including security, repair, and upkeep). CSP solutions take over several vital responsibilities, significantly reducing the necessary investment. Firms simply rent out the services and software they need, and only pay for it as long or as much as they use it.

Predictable expenses

Unexpected IT demands, scaling, and maintenance issues can represent a large amount of unforeseen costs for an organization. Outsourcing cloud services from cloud service providers circumvents these unexpected expenses; businesses can decide ahead of time what their budget will be, and then pay a consistent monthly bill. Any outages, repairs, maintenance, or other issues are addressed by the provider at no additional charge to the user.

Extended technological viability

Technology is not static; it’s constantly evolving. Updating inhouse systems and training IT personnel to keep up with technological advances can be extremely difficult and time consuming. To remain competitive, CSPs must be up to date and well versed in all new relevant technologies and need to ensure that these technologies are available and usable for their customers. By working with cloud service providers, businesses can future proof the systems and tools they depend on.

Centralized services and applications

In-house network and database solutions tend to be spread out across multiple locations and silos, making a comprehensive view very difficult to achieve. CSP centralizes all services and software in a single data center. Users can access and analyze important information, employ vital tools, and more, secure in the knowledge that everything is fully integrated and in one place.

Improved disaster recovery

Local disasters and other emergencies can interrupt in-house network services. Cloud-based solutions, maintained offsite, are essentially immune to these kinds of emergent events. At the same time, cloud service providers depend on proven redundancy and resilience plans to ensure business continuity even when facing the most extreme disruptions. This means faster recovery and minimal downtime.

Faster issue-response

Many CSPs offer proactive monitoring as part of their services. Likewise, by keeping all relevant data and resources in a single, cloud-based data center, users can more easily identify issues as they arise. In both cases, this allows for faster response times, and less likelihood of major disruption.

Within cloud service providers, there are two different subcategories that may be worth considering: public cloud and managed private cloud.

Public cloud

Public cloud environments are multi-tenant, meaning that they use the same computing resources to serve multiple customers. The cloud service provider owns the infrastructure and is responsible for maintaining it. They are also responsible for ensuring that data and resources are accessible only to authorized users; no organization should be able to access information being held for other cloud customers in the same cloud environment.

Public Cloud vs Managed Private Cloud

Managed private cloud

Managed private clouds are single-tenant services offered by specific CSPs. Software is deployed, managed, and configured by the third-party provider, but is only usable by the client organization. Resources are not shared between multiple users.

Other differences between public and managed private cloud

  • Cost
    Public cloud resources are usually charged using the pay-as-you-go model, based upon either hours or bytes used. Managed private clouds may instead employ fixed contracts, with provisions for addressing spikes in activity.
  • Location
    Public clouds generally allow user access from anywhere in the world, while the specific, unique cloud infrastructure of managed private clouds may necessitate more local support and maintenance staff.
  • Security
    Although most public cloud providers are better suited to securing data and preventing or responding to breaches than individual organizations, there is still some risk associated with not owning or managing the systems that house vital data and functions. Managed private clouds depend on hiring and partnering with proven providers who are up to speed on all potential security and compliance issues.
  • Reliability
    Public cloud providers need to be able to guarantee a specific percentage of up time to fulfill the terms of their contracts. Service-level agreements may also dictate terms of service restoration and change requests. By maintaining a single cloud infrastructure dedicated to one client, managed private clouds are less able to spread computing loads across many servers, and thus may be more likely to suffer from physical hardware-related issues.
  • Technical Specifications
    Public cloud providers are responsible for obtaining certification to run relevant operating systems middleware, storage, etc., and ensuring that the cloud resources and tools integrate well with the client’s existing systems. On the other hand, managed private cloud users must be individually certified.
  • Support
    Public cloud providers often rely on standard support contracts designed for applicability across a range of users and industries. These contracts may include validating active software subscriptions, resolving issues, maintaining security, and deploying patches. Private cloud contracts are less standardized and are more customizable to the specific support needs of the client.  

There are many cloud service providers, and finding the right one can be difficult. Here are four things to consider when evaluating possible vendors.

Health and Processes

Cloud service providers are responsible for essential data and many important functions that can directly affect an organization. This means that one of the most important factors in choosing a CSP is the state of the provider itself. Is the CSP financially stable? Does it have formally established management policies and procedures in place? Can it demonstrate essential business and technical know-how? Can it validate compliance with client requirements? And finally, does it have a reputation of trustworthiness?


The service and support provided by the CSP needs to be quantifiable and dependable. They need to be able to guarantee an agreed-upon level of service and demonstrate that their performance matches contract obligations. Do they provide acceptable service level agreements? Do they allow for effective reporting and resource monitoring? Is billing and accounting quantifiable, so that the client can easily see what they are paying for, and is there support available if billing-related issues arise?


As an effective alternative to many IT tasks and processes, cloud services need to demonstrate the technical capabilities their clients depend on. Are the cloud services easy and intuitive to deploy and manage on the client’s side? Do they employ standard interfaces, so that clients can build further connections to the cloud? Is event management integrated with monitoring and management systems? Is there a formal change-management process in place? Is the CSP capable of supporting hybrid cloud models?


Finally, the cloud service provider must be capable of protecting their clients’ vital data. Do they offer a comprehensive security infrastructure, and are their security policies adequate for controlling data access? Do they employ effective identity management to protect applications and data from unauthorized changes? Do they have policies to ensure the integrity of customer data? Are their physical hardware assets secure, and are data centers protected from disruptive events, with redundant power and networking, and backed by reliable recovery and contingency planning?

Businesses that are migrating to the cloud face several hurdles that cloud service providers may not be able to fully address. ServiceNow bridges the gap.

Offering digital workflows and making it possible for organizations to automate vital tasks and integrate disparate systems, ServiceNow works with cloud service providers to modernize vital processes. ServiceNow helps ensure enhanced security and privacy, facilitating a more seamless digital transformation, and a quicker transition to a cloud-service environment. And through it all, ServiceNow helps businesses remain fully compliant with all necessary regulatory and security standards.

ServiceNow is leading the charge towards digital transformation, cloud adoption, and all the benefits that come with them.

Move your customers to a public or private cloud quickly and securely with governance in place.

Bridge the CSP gap with ServiceNow

Working with ServiceNow, cloud service providers can create a managed service offering across IaaS, PaaS, and SaaS.

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