VPS hosting and Cloud Computing are very close to the same. The main difference is VPS hosting provides you with a virtual server sitting on one physical server while Cloud Computing will provide you with that virtual instance on a cluster of servers that are sharing resources. Neither one is technically more powerful than the other, but theoretically Cloud can offer you limitless resources if you have lots of cash to burn.
Because Cloud is run over a cluster of servers, it should be more reliable than the most basic form of VPS. If your host server fails in a VPS environment than your VPS will go down with it. However quality VPS providers also offer high availability options that are capable of automatically moving your instance to a new host without interruption..
VPS is not your regular web hosting, and it is a part of the IaaS category!
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