The confusing thing is some people refer to VPSs as 'cloud', which sort of makes sense when you compare them to EC2. EC2 seems more 'cloudy' because... um, we don't know what kind of hardware it's running on? I don't know. I was trying to explain what 'cloud' means to my tech-savvy, but non-industry brother and was puzzled by the issue of whether Linode is a 'cloud' service or not.

I guess it sort of could be, but I'd consider a "cloud" service something where you either a) can spool up or shut down servers dynamically from an image without any additional configuration (ala EC2 or Heroku), or b) a commodity service like Amazon S3 or MongoHQ where you pay by usage and they handle resource allocation.

I see scriptability and automation through an API as important to 'cloud' classification too. Good point about the automatic resource allocation, I think that's actually the key. On Linode you're paying for a segment of a specific machine, more like a dedicated server than EC2.

Why can't we call VPS as cloud! I think the "cloudy" character does not come just because we do not know how or where is it running or what the hardware is, it comes more because I can deploy an application or store a data somewhere on the earth right from my home. A better way to put it could be - VPS are first generation cloud/kind of raw version whereas EC2, GAE, Heroku et al. are the advanced cloud systems where some things could happen automatically.

How about classic shared hosting? You can go get a server on dreamhost or something and have a PHP app up in a couple of hours. It's not very advanced, but the effect is somewhat the same...

Thanks for the suggestion. I've been working on a project that does dozens of writes per second and on my local machine I used redis. The costs of running redis for this on EC2 is prohibitive. The costs at Linode for even a 1gb vps is quite reasonable and scaling that up to larger sizes isn't that much more.