Providers are mostly between your logic and any type of data warehouse (database, xml, etc.). MSDN mentions:
Providers of abstract storage media are much the same as device drivers abstract hardware devices.
For More Information: Microsoft ASP.NET 2.0 Providers: Introduction
For example: Instead of working with a database or XML, you want to work with file storage on disk somewhere in your network. To manage this, you create a custom provider and use it in your logic to save data.
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