The cloud, when referring to virtualization of servers, saves energy and cost while increasing performance & reliability. You take one server and split it up "vertically" into multiple virtual machines instead of the traditional system of scaling "horizontally" by adding additional physical machines . Each one of those virtual servers has completely separate resources from the next and functions independently like a dedicated server. Each has dedicated CPU and dedicated RAM that no other machine can use, they just happen to be housed in the same physical unit. But today that is not a problem with more powerful servers that are able to accomodate multiple cloud servers. It is no wonder clients are retiring their dedicated server outfits in favor of JerusaHost's vps equivalents .