Generally speaking, cloud providers fall into three categories: software-as-a-service providers; infrastructure-as-a-service vendors that offer Web-based access to storage and computing power; and platform-as-a-service vendors that give developers the tools to build and host Web applications. Here are 10 cloud companies that are worth watching.

Company name: Amazon 

Founded: 1994

Location: Seattle

Cloud offering: Amazon Web Services, a half-dozen services including the Elastic Compute Cloud, for computing capacity, and the Simple Storage Service, for on-demand storage capacity.

Why we're watching it: Amazon is one of the true innovators in Web-based computing, offering pay-as-you-go access to virtual servers and data storage space. In addition to these core offerings, Amazon offers the SimpleDB (a database Web service); the CloudFront (a Web service for content delivery); and the Simple Queue Service (a hosted service for storing messages as they travel between computers). By launching the Elastic Compute Cloud in 2006, well before most of its competitors, Amazon has become almost synonymous with "cloud computing." But criticisms are starting to pop up regarding Amazon's reliability and service-level agreements.

CEO: Jeffrey Bezos, Amazon's founder, was previously a financial analyst.

How Amazon got into cloud computing: One of the largest Web properties in existence, Amazon always excelled at delivering computing capacity at a large scale to its own employees and to consumers via the Amazon shopping site. Offering raw computing capacity over the Internet was perhaps a natural step for Amazon, which had only to leverage its own expertise and massive data center infrastructure in order to become one of the earliest major cloud providers.

Who uses the service: Tens of thousands of small businesses, enterprises and individual users. Prominent customers include the New York Times, Washington Post and Eli Lilly.

Company name: AT&T 

Founded: 1983

Location: Dallas

Cloud offering: Synaptic Hosting, an application hosting service that offers pay-as-you-go access to virtual servers and storage integrated with security and networking functions.

Why we're watching it: Amazon and Google may be the biggest names in cloud computing today, but don't discount the built-in advantage telcos have when it comes to infrastructure. "Building publicly accessible cloud infrastructure is not inexpensive or uncomplicated," Pund-IT analyst Charles King says. "The service providers already have those infrastructures in place – the data center assets, connectivity and billing."

While AT&T has a head start, rival Verizon offers cloud-based security services and seems poised to make a larger run at the cloud market later this year.