Scalability

Scalability is the property of a system to handle a growing amount of work by adding resources to the system. For example, upgrading on or many servers’ capacity.

Vertical scalability

Scale up a system is adding more resources to it; like CPUs, storage or memory to a single server.

Horizontal scalability

Scale out a system is adding more nodes to it, so they can work as a cluster. For example, adding more servers to a network to balance workload between them. We sometime called this principle elasticity.

It's a cheaper and more effective approach.