In this article, the Forrester analyst Mike Gualtieri draws a useful distinction between "local cache", "distributed cache", and "elastic cache".
He then places Memcached firmly into Distributed Cache catagory.
No living technology holds still, and Memcached is no exception. Memcached did start out as just a distributed hash, but there has been a lot of work by many smart people to make it elastic as well.
I work for Gear6, which makes a Memcached server that has a number of neat "enterprise" features, one of which is elastic resizing, which we call "dynamic services". You can resize in a datacenter by adding more units and resizing into them, and even neater, you can resize "in the cloud", on Amazon EC2. You go to the UI, tell it to expand the cluster, and it will spin up more EC2 instances itself, and then expand into them.
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