A web hosting make use of a remote computer connected to high speed lines to serve data files to your computer or mobile device. This computer normally have a better hardware than household computers for speed and reliability. Just like a normal computer, the deciding factors in a conventional hosting is also the CPU, RAM, SSD etc. Normally those who start with a dedicated server go with a meek configuration and get hardware ( starting with RAM ) upgraded according to their needs ( like increase in traffic to their website / service ). This scaling of hardware capabilites of dedicated server normally have a buffer zone. Ie, people normally upgrade their server hardware keeping future needs in mind. In effect, they end up paying / investing for more than they actually need. The upgrades normally bring a downtime and are costly as well.
Another drawback of conventional hosting is that you normally end up suffering a down time if your single physical server is undergoing a maintenance or hardware damage. There is actually no escape from such scenarios in natural conditions.
Benefits of cloud hosting
In a cloud hosting set up, the content is served from a cluster of servers. That is, if a single server goes down, you are still protected from facing a down time. This is because it is not a single server that is serving the content but a cluster. Another benefit of going with cloud hosting is that you have better scalability. Ie, you pay for what you use. Since you are not bound to a single server, you are not tied to it's hardware specifications while offering the content. This helps your website serve well and economically during peak time and off peak time.
Do you think cloud hosting justifies the money you pay for it ?