We use Heroku. It's a Platform as a Service built on Amazon's cloud infrastructure. It is simple to use when our app is just a toy and is built to scale up for high concurrency or high sustained load.
Like Rails, Heroku uses conventions to make decisions for us that are unnecessary for us to make. Some things like web servers and app servers are solved problems.
They act as our outsourced operations team. The amount of time we can focus on the product instead of solved problems is worth the premium over bare-bones Amazon Web Services.
The cloud promises lower operating costs, especially at the beginning when capacity can be lower. Forget about sunk costs of expensive servers.
The cloud and the services it enables will empower our clients' businesses to start and operate in a manner that has never been possible before without significant upfront investment.
If we offer file uploads for features like user avatars, we upload them to Amazon S3.
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