What is cloud hosting?

This structure follows the "utility computing model" in that it is offered as a service rather than a particular product (for instance building an on premise network infrastructure) and thus follows a fixed reccuring expenditure model (something like rent payment).

In general the client has the choice of adding more resource as his need for more storage and performance grows, skipping the necessity to invest into upgrading his own infrastructure. In this sense, cloud hosting is very cost efficient for a customer as it diminishes his need for infrastructure investments into upgrades, new licenses and hardware to practically zero.

Cloud hosting is an alternative to shared or VPS dedicated hosting and in this regard can be considered as an extension of the concept of clustered hosting where websites are hosted on a number of physical units. The difference with cloud hosting being, that the network of servers is extensive and includes multiple data centres in multiple locations.