Horizontal — add more machines. Vertical — add more power to existing machine.
Horizontal Scaling (Scale Out):
Horizontal:
[Server 1]
[Server 2] ← Load Balancer
[Server 3]
(Multiple servers)
Vertical Scaling (Scale Up):
Vertical:
[Server: 4 CPU → 8 CPU → 16 CPU]
(More powerful single server)
Key differences: