How would the Service Objects approach work with Z-axis scaling?
There's no real problem with sharding using service objects: you parameterize them to determine what shard they are serving.
There are issues with replacing one if it goes down, or adding in a new one, or hot shards vs unused ones, but these are all familiar with any kind of sharding.
Y-axis scaling: splitting the application with functional decomposition (a server for account info, another for catalog, etc.)
Z-axis scaling: each server runs an identical copy of the application (like X-asis) but each server is responsible for only a subset of the data - some other component of the system is responsible for routing each request to the appropriate server (Ex: sharding)
See this diagram http://akfpartners.com/techblog/wp-content/uploads/2008/05/a... taken from http://akfpartners.com/techblog/2008/05/08/splitting-applica.... For in-depth discussion, see the book The Art of Scalability.