When I get a cloud instance I am getting the same thing as a dedicated server?

Question

When I get a cloud instance I am getting the same thing as a dedicated server right? Just with a cool name? Can it run custom Linux kernels? If it can, I see no difference between cloud hosting and a dedicated server!

Is it like a VPS where the kernel cannot be modified / customized? Is it like dedicated servers where I can modify anything? Why doesn't everyone choose the cloud since the cost is less. What's the gimick?

Specifically when I say cloud I am talking about this: http://www.rackspace.com/cloud/cloud_hosting_products/

Answer 1

I do not believe cloud instances are on dedicated servers. This article, http://en.wikipedia.org/wiki/Cloud_computing should give you some insight.

On a high level, cloud computing provides you a metered service instead of a product. That means you only pay for what you use and that your system resources, bandwidth and cost will scale with your needs. The flexibility and low cost for small sites is why it is becoming so popular. Specifically, if you create a site and it gets less than 1000 visitors a day it is cheap to run. Then if your site gets national recognition and your site increases to 100,000 visitors a day the cloud computing servers hosting your site should be able to expand to deal with the additional traffic but the cost will also go up as well.