Cloud hosting sometimes gets confused with a virtual private server, or VPS. Both configurations rely on the virtualization of physical server resources. Although a cloud server can be called a VPS, a VPS is not a cloud server. One of the key differences, aside from the infrastructure configurations, is the payment model — the automation and vast network associated with cloud hosting enables providers to offer cheaper, pay-as-you-go solutions that can be scaled up or down at a moment’s notice.
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Cloud hosting is an alternative to hosting websites on single servers (either dedicated or shared servers) and can be considered as an extension of the concept of clustered hosting where websites are hosted on multiple servers. With cloud hosting, however, the network of servers that are used is vast and often pulled from different data centres in different locations.