> If you need to scale month to month and are growing 50% per month,

Then rent more servers.

> If you are very small and can live with 10 instances,

Then rent a few servers.

I maintain that there are extremely few cases for a typical website to use the cloud. To handle peaks, it is both simpler and cheaper to keep enough capacity just idling around than spinning up and down Amazon instances. The cloud is almost always a useless hype. It can be different if you can architect to use the various services Amazon provides.