The web hosting industry is rapidly changing. In the early days you had traditional hosting, but now the web is seeing a shift towards scalable PaaS and managed web hosting.
With traditional hosting, you were stuck with whatever version the server was running by your provider. If they were running PHP 4 and you wanted to build a PHP 5 app, you were just out of luck.
With cloud offerings you can generally choose different version of the software whether thats PHP or MySQL instead of just a single version fits all.
As users continue to grow trust in the web, reliability and stability is continued to need to grow. Cloud offerings will offer the ability to sync and move code and data between environments rather than simply editing on production like traditional hosting has seen for years.
By working on a development environment and testing the code and pushing to staging and testing in another environment, you ensure your code is robust before pushing to production.
In traditional hosting there was no scaling, you were on a server with one or two thousand other people and if the server went down you went down with all of them.
Applications in the cloud that can truly scale and run on multiple servers benefit from the ability to scale and not go down when traditional hosting providers only run a site on a single server.
Cloud providers generally isolate the services so that each site is separate and cannot affect another. If a site gets hacked in traditional hosting it generally takes down an entire server through vulnerabilities and all sites on it, whereas cloud hosting is protected from such intrusion.
Traditional hosting has brought FTP and file managers which work great for designers and agencies and those making simple changes. When you have a team of developers, more advanced tools are required. Cloud offerings are bringing more advanced deployment options such as deploying with git push and CLI ruby gems.