According to dictionary definitions, there is no difference between servo drives and vector drives. Any drive with an encoder and closed loop speed regulation is a servo drive. In industry the servo drive is considered a higher performance and premium priced drive.
Vector drives are usually tuned with a speed regulator response of 0.5 to 5 to 10 radians/second. Servo drives can be tuned 10 times faster to 120 radians/second. This results in much higher performance with a servo drive. The servo drive can get to speed or to position 10 times faster than a vector drive.
Servo drives are often used for accurate positioning of cutting tools or parts. The more responsive the drive is, the faster a part can be moved to where it is needed. Servo drives can also be used for spindle winder type applications or even controlling tension at a nip. The servo drives often have library functions (software) to perform these tasks.
In order to be this responsive, rules for servo drive system restrict the combination of drive, gear and motor which can be used together. One typical restriction is that the ratio of the load moment of inertia must be less than 100 times the motor inertia.
Servo drives should be considered where very responsive tension control is important. Servo drives are generally more expensive kiloWatt for kiloWatt than vector drives, but for smaller lines the differential may be negligible.
To date vector drives far outnumber servo drives in web handling.