Great questions. Cloud is an advanced virtualization technique in which the Virtual Machines ("Cloud Servers") benefit from additional tolerance to failures within the architecture or infrastructure of the Virtual Environment ("Cloud Data Center", "Cluster").
Formerly, when part of the Virtualization Environment failed, such as server hardware failure or software-related issues, the virtual machine and it's data would be adversely affected, sometimes leading to complete data loss. A primary distinguishing feature of the cloud is the presence of network storage, which is used to store a secondary (or more) set of data, which provides Data Redundancy, in case of disaster.
Whereas the pre-Cloud virtual machine was susceptible to a single point of failure, this model now provides failover in the case of disaster. If the virtual machine is affected or loses data, the Virtual Environment is now capable of retrieving the secondary set of data from the Network Storage to rebuild and replace any data affected in the disaster.
Obviously, these features are preferable to the previous, single point-of-failure virtual environment. As with everything, the added features and benefits of cloud hosting, come with added costs. Whether or not these costs are right for you and your clients depends on a number of factors and cannot be determined.
The best advice I can offer is to evaluate each service requirement uniquely to determine the best hosting solution for that specific use-case. Historically, this methodology has been successful for us and our clients.
