Different from other hosting solutions (shared or dedicated) which depend only on one machine, cloud hosting is based on an unlimited number of machines to act as one system. In short, even smaller websites would benefit from dedicated server-like services at a very affordable price.
Benefits at a Glance
Reliability, High Availability
Cloud hosting is not hosted on one single instance of a physical server, but hosted on a virtual partition which draws its resources, such as disk space, from an extensive network of underlying physical servers.
If one server goes offline, it dilutes the level of resources available to the cloud a little but will have no effect on the availability of the website whose virtual server will continue to pull resource from the remaining network of servers.
Flexible and Scalable
If a your website demands extra resources due to a spike in visitor traffic or the implementation of new functionality, cloud hosting allows these resources to be deployed in real time on demand and not limited to the physical constraints/capacity of one server.
Thus Cloud hosting can be defined as a web hosting solution that provides resources on demand.
Cloud hosting does not suffer from hardware or software bottlenecks. Servers and resources can be added to immediately scale up resources whenever necessary.
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