This is the latest technology to trickle down to the web hosting industry.

First off, here's a quick review of a typical web hosting company. They have servers housed in a secure data center. Each server holds around 100 to 500 individual websites, depending on the size of the individual sites. There are all types of redundancies. The hard drive is mirrored to another drive (RAID configuration). Then there are dual power supplies within the server housing. Also, there is an off site back up program of some sort, usually backing up the entire server once a night. So, any individual hardware failure is covered - except for a mother board failure. Hardware downtime is usually limited to a couple of hours and this is an accepted metric throughout the industry. Even the biggest of websites go down on occasion.

Cloud hosting (or grid hosting) is a new technology that spreads your website across multiple individual servers. This not only creates huge redundancies, but it's also a very energy efficient way to run servers. Even old servers can be included within the cloud, They can be used until they have a critical failure and then they just delete themselves from the network.
This technology can provide almost 100% hardware uptime. In theory it is 100% but no one would ethically promise that........

Then, there are non hardware failures. These are still managed by the data centers.

Someone attacks your website. Possibly a competitor or a someone looking for financial information. Your website could be destroyed. Then you need to ask (and sometimes pay) your hosting company to reload the most recent back up,
Another event may be an attack on a server or an entire data center. This causes so much traffic that all websites will slow down or totally stop resolving. Data centers put up a serious defense for these type of events and can usually prevent much damage. Not any damage to your individual website, but no one can access it until the attack is under control.

We conclude by saying that cloud hosting will increase your websites uptime, but still, other things beyond your control could happen........