If Google can deliver a semi-decent IaaS offering that works well with App Engine IMO they will have a uniquely powerful platform.
App Engine is often criticized for being expensive compared to AWS, but putting together a production ready setup (i.e., automatic failover in the case of data center failure) on AWS isn't cheap since you need at least two of everything: multiple EC2 instances sitting behind a load balancer (ELB) and redundant databases (i.e., RDS Multi-AZ). I know because I'm setting up exactly this configuration right now for my DNS hosting service (http://slickdns.com).
But if Google's IaaS offering could fix all the fiddly bits that App Engine currently doesn't do (e.g., custom SSL, native binaries) it would surpass AWS in terms of functionality.
Selling bandwidth and white-label servers is easy. Building a production ready arbitrarily scalable web platform is much harder.
App Engine is often criticized for being expensive compared to AWS, but putting together a production ready setup (i.e., automatic failover in the case of data center failure) on AWS isn't cheap since you need at least two of everything: multiple EC2 instances sitting behind a load balancer (ELB) and redundant databases (i.e., RDS Multi-AZ). I know because I'm setting up exactly this configuration right now for my DNS hosting service (http://slickdns.com).
But if Google's IaaS offering could fix all the fiddly bits that App Engine currently doesn't do (e.g., custom SSL, native binaries) it would surpass AWS in terms of functionality.
Selling bandwidth and white-label servers is easy. Building a production ready arbitrarily scalable web platform is much harder.