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Let's clear up some misconceptions about storage. First, cloud storage isn't always hosted on a public service, such as AWS and Microsoft Azure. And second, virtualization and virtualized data storage don't just refer to virtual servers or desktop systems hosted on VMware ESX or Microsoft Hyper-V. These two misconceptions are related, because one true thing about cloud storage is that it is virtualized.
To a certain extent, all storage is virtualized. Even the most basic block-based hardware system -- a single hard disk -- is mapped by the storage controller attached to the hard disk. This translates the physical hardware blocks, sectors and tracks on the hard drive's physical disks into a virtual set of blocks, sectors and tracks that the motherboard and storage controller use to communicate with the physical disk.
Likewise, file-based storage creates an SMB or NFS volume containing files and metadata, even though the underlying file system might be different from the one presented by the storage system. Many file servers use more modern file systems, such as ZFS, instead of SMB or NFS, and then translate. Others use CIFS or NFS and present the volume as both. That way, an SMB volume can be presented as an NFS volume and vice versa. This is also a type of virtualized data storage.
The truth about virtualized data storage
Storage virtualization refers to storage that isn't directly accessible to the storage consumer. It can be a server, server instance, client system or other system that needs storage. Nearly all storage in the data center and public and private clouds is virtualized.
Even iSCSI volumes and Fibre Channel LUNs that appear to be block devices and theoretically identical to an internal hard disk can be considered virtualized. They're generally RAID volumes, which mean that several physical disks are presented as one or more virtual disks. In addition, software features, such as tiering, snapshots and replication, require a virtualization layer between the physical storage and the consumer. Deduplication, compression and object storage layers add additional layers of virtualized data storage.
Virtualization can be useful. A volume that appears to an application or end user as a single contiguous directory tree may include files hosted on different storage tiers, some on local hard disks and others on low-cost cloud storage tiers. This results in high-performance storage at the lowest possible cost, because virtualized data storage lets files that haven't been accessed for a while be moved to inexpensive storage.
Cloud storage is often assumed to be storage in the public cloud, like Amazon S3, Google Cloud Platform and Microsoft Azure. However, many vendors offer some form of cloud storage, ranging from backup vendors, such as Barracuda and Zetta; to Oracle, Salesforce and other cloud application vendors; to alternatives to the big three, such as DigitalOcean and Rackspace.
Data center cloud products also make storage easily available to applications, whether or not they're running locally. Dell EMC, Hewlett Packard Enterprise, Hitachi Vantara and NetApp all offer these capabilities. Some of these products are proprietary, some are single-purpose and some are based on open source standards, such as Ceph.