Most cloud providers follow some variant of the "design for failure" model. A handful of providers, however, follow the traditional model in which the underlying infrastructure takes ultimate responsibility for availability. It doesn't matter how dumb your application is, the infrastructure will provide the redundancy necessary to keep it running in the face of failure. The clouds that tend to follow this model are vCloud-based clouds that leverage the capabilities of VMware to provide this level of infrastructural support.
The downside of the "design for failure" model is that you must "design for failure" up front.
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