When it comes to hosting, cloud architecture refers to using a separate server for every single part of the web hosting service. Such a configuration provides improved performance because one machine will be used just for file storage, another just for running databases, and so on, thus different system processes will not run on the same machine. This will reduce the probability of system errors considerably and will allow your sites to run faster, not mentioning the better uptime. In case you're looking for this type of service, it is important to double check that you'll really get it since a lot of companies advertise cloud hosting packages, however the control panels they use aren't designed to work in a true cloud and can operate only on a single server. The issue with using just a single machine is that in case one service goes down or generates high load, the whole server will most probably go offline, so your sites will no longer be accessible.