Packer can be used to create vagrant boxes or production boxes.
"don't use vagrant in production" : vagrant boxes are built with security holes in it to allow smooth scripting/ssh/tunnelling/sudo (no passphrase, known password : vagrant).
It can be seen as kind of replacement for veewee
Production can be on
- your "laptop" (virtualbox)
- own datacenter or your client datacenter (vmware)
- in hosting service like (digital ocean/rackspace/...)
- more specific hosting like AWS
AWS prebuild image (AMI) helps a lot when using "auto scaling". When aws want to start a new server it starts with ready to start (no provisioning/deployment script at startup) See this presentation on how packer can fit with aws.