VPS or Cloud Server: What's the difference and which do I want?

We interchangeably use the terms VPS and Cloud Server at VPS.net to describe our product. The truest term likely isn’t either of these — Cloud VPS would actually be the best way to describe our cloud product, as it’s a virtualized server, on redundant cloud infrastructure. Sometimes we use the term VPS out of habit; other times, there are actual reasons, such as for SEO purposes or commonality to the customer.
So really then, what’s cloud and what is just a VPS?
While there’s no formal definition of what the cloud is at this time, we tend to consider there being a requirement of a few basic aspects in order for a service to totally qualify as cloud hosting. Before we go into the differences, lets explain how they’re the same.

• Both VPS & Cloud Servers use virtualized environments.
• Both VPS & Cloud Servers use resources from a single hypervisor.

As you can see, both a VPS and cloud servers use the same basic virtualized environment to get started. The type of virtualization is going to greatly depend upon the provider, as multiple virtualization methods can be used to offer VPS or Cloud servers. Our software provider, OnApp has support for Xen, VMware and a few others. We’ve chosen Xen for our virtualization platform.
A popular misconception about cloud servers is that they’re able to use the resources of a multiple servers. This is actually untrue. A Cloud Server is only able to use the resources of a single machine. Unfortunately, while technology has come far, we’re still unable to pool resources together from multiple machines to work in conjunction with one another.
What the heck are the benefits of a Cloud Server over a traditional VPS?
Despite the similarities to a traditional VPS, a cloud server has several significant advantages that can be beneficial to a website owner. Cloud Servers have three primary advantages over a traditional VPS.

• Near limitless flexibility with resource sizes.
• On the fly resource upgrades, sometimes without even requiring a reboot.
• Significantly better redundancy
• Centralized redundant storage

The first two advantages go together; with a cloud server, you’re able to upgrade to significantly higher server specifications, and you’re able to do it on the fly. This means that if your site starts to receive an enormous amount of traffic, it’s not necessary to migrate your site to a new server. You can simply add more resources, and the changes will take effect immediately, on the existing server.
The second two also go together quite well. In the traditional VPS environment, your server is hosted on a single hypervisor, with typically the hard drives running in a RAID 10 array. Not a bad setup. With a cloud server, your server can be hosted on any of the hypervisors on the cloud, because your data is hosted on a centralized storage system called a SAN. With this arrangement, if a hypervisor fails in the cloud, another one can simply take over the work of hosting your cloud server. Most cloud providers also take it one step further, by replicating your data across multiple SAN units. This means that one of the SAN fails, the other will take over the process of hosting your data.
All and all, cloud servers have essentially taken the traditional VPS and made significant improvements to it. Considering that a cloud server normally runs around the same price range as traditional VPS hosting, there’s really no reason not to consider the cloud for your website.