A company's web server is hosted at a local ISP means that the company is using the ISP's infrastructure and services to run and manage its web server, rather than having its own physical server on its premises.
This is an example of a cloud provider, which is a type of service provider that offers cloud computing resources and services over the internet, such as servers, storage, databases, networking, software, analytics, etc.
A cloud provider can be classified into three main categories: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). In this case, the company is using IaaS, which means that it is renting the ISP's hardware and network resources to host its web server, while maintaining control over the operating system, applications, and data.
The other options are not correct because:
Allocation is the process of assigning or distributing resources to users or applications, not a type of service provider.
An on-premises data center is a type of data center that is located and managed by the company itself, not by a third-party provider.
A branch office is a location of a company that is separate from its main office, not a type of service provider.
Reference:
CompTIA Network+ N10-008 Certification Study Guide, Chapter 1: Networking Fundamentals, Section 1.5: Cloud Computing1 Professor Messer's CompTIA N10-008 Network+ Course Notes, Page 9: Cloud Computing2 Professor Messer's CompTIA N10-008 Network+ Training Course, Video 1.5: Cloud Computing3