Virtualisaton is the basic task you're doing, you're making a "virtual" computer. The idea of the "cloud" is more that these virtual machines are hosted in a room somewhere far away with other virtual computers there as well.

For instance, I can install VMWare and get virtualisation going on my laptop, but I wouldn't consider that the cloud. Similar, you can get bare metal computers on the cloud which aren't virtualised.

At the end of the day there exists a hypervisor... Virtualization.

So do VPS providers. Ask for a VPS and you'll get it in the same amount of time as EC2.

The difference is only surrounding automated deployment (cloudformation) or services that are offered (RDS)