There are some distinguishing factors between IaaS clouds and VPS: paygo pricing (VM & bandwidth), API, self-service automated provisioning, no term commitments, scale-up/down (CPU, memory), VM imaging/cloning/templating, off instance storage. Some VPS providers like Linode, Slicehost, RimuHosting, etc. do offer a few cloud like features, but I wouldn't put them on the same playing field as EC2. If you don't need the additional flexibility and features of cloud, Linode is an excellent VPS provider.<p>There is also a big difference between PaaS cloud services like AppEngine, Azure and Heroku which require your application to fit within a particular mold (programming language, packaging, deployment), and IaaS cloud providers which offer you the full flexibility of root access to a dedicated server.