Karmic synergy can provide hosting via virtual servers which draw their computing resources from a network of underlying physical web servers. Cloud hosting allows a potentially unlimited number of machines to act as though they are one system for hosting a website. This means that your website is far less susceptible to downtime, and is capable of running at full speed during peak usage.
What this all basically means to you is that depending on your requirements, you as clients can tap into this hosted service as much or as little as you need and only pay for what you use. For many smaller businesses this can result in drastically reduced costs due to what is effectively a "pay-as-you-go" system depending on the size and traffic of your website.