I am willing to host multiple web sites (wordpress / drupal) in the cloud. I am doing it mainly because of automatic scalability. I do not want to engage myself on server administration sort of work and totally focus on development. Should I go for PaaS, IaaS or SaaS.
Given that which service provider will be better to serve my purpose.
The services I am looking forward to are Azure, dreamhost, elastichosts etc.
I am looking forward to some other suggestions as well.
I would suggest that you look at WPEngine and Pantheon. I’ve used both and they are reliable platforms. WPEngine only hosts WordPress sites. Pantheon hosts both Drupal and WordPress installs.
Both have automatic updates, nightly backups, amazing support, great up-times, and have git integrations (you push a commit, and the site updates). Pantheon has a video series that explains their service while WPEngine has an extensive knowledge base. If you would like more options, you can look at the wordpress.org page for managed hosting and the drupal.org page for managed hosting.
Pantheon is my preference of the two since you also get shell access and you can use command line tools such as Drush and WP-CLI. I also like their backend interface more and the ability to have multiple development environments.
You have said you are willing to host multiple web services in the cloud. Based on that, I compile the following answer. But I see you have mentioned about WordPress also.
What you need is a PaaS. Not a SaaS or an IaaS. A PaaS is a platform which allows you do build solutions on top of it. For example, service hosting, app hosting, storage, analytics etc. If you want to host services or apps, I can suggest the WSO2 Cloud.
Not only hosting, it provides you a development platform as well. You can develops services and apps from scratch. It provides you build facilities, database provisioning, an editor etc. WSO2 Cloud consists of an App Cloud and an API Cloud. So, if your app needs to consume some APIs or if you want to expose your developed services as APIs, you can use the API Cloud.
Both of above clouds have the autoscaling capability (you dont need to worry about it, internally handled). App cloud provides you a development, testing and production environment to manage your apps/services lifecycle.
More information can be be found at
https://docs.wso2.com/display/AppCloud/WSO2+App+Cloud+Documentation
https://docs.wso2.com/display/APICloud/WSO2+API+Cloud+Documentation
Note that WSO2 Cloud is a beta service at the moment.