Scalability is a system’s ability to swiftly enlarge or reduce the power or size of computing, storage, or networking infrastructure thereby adapting to resource demands, optimizing costs, and improving the operations team efficiency.
Scaling up is adding further resources, like hard drives and memory, to increase the computing capacity of physical servers.
Scaling out is adding more servers to your architecture to spread the workload across more machines.
A good indicator of when to scale up is when your workloads start reaching performance limits, resulting in increased latency. Only the throughput can be increased, but when you hit any hardware bottleneck to extend the hardware, we need to scale out.
Based on use case , operational cost, rack space and forecasted workload demands, customer can choose to prefer scale up or scale out.