What is Horizontal Scaling?

Horizontal scaling is a technique where you use multiple smaller systems as a pool.

What is Vertical Scaling?

Vertical Scaling is where you use a system which has more processing power (basically a more powerful machine than the current one)

Horizontal Scaling	Vertical Scaling
Scales Linearly (as user increases or decreases number of machines can be scaled according to that)	Can be scaled upto some extent
Load Balancing Required	Load balancing not required
Resilient to failure	Single point of failure
Network calls is slow (RPC) as data communication has to be from one system to another	Inter process communication
Data Inconsistency (example to make ACID for transaction)	Consistent

In Real World we use both Horizontal and Vertical Scaling.

Suggested approach would be start with Vertical Scaling and move to Horizontal Scaling.

A Best system design will take best of the both worlds