In a much anticipated move, Google announced yesterday the Google App Engine. This is Google's (initial) entry into the cloud computing space, competing with Amazon's EC2 and S3.
Amazon's approach with EC2 and S3 appears to be a fairly straight forward utility computing approach. You pay by the CPU minute on EC2 and by the GB on S3. Amazon uses Amazon Machine Instances (AMI) as the deployment units for EC2. In simple terms, an AMI is a virtual server image, similar to what you would use with VMWare or VirtualPC. At this point I believe it only supports Linux, but you can run just about anything that runs on Linux (which is just about anything). The difference being that it runs on Amazon's servers and you only pay when it is running.
Google's approach essentially a hosted web application. The deployment unit is your Python application, and you run in a sandbox environment. They also provide easy integration to Google services such as Google Account and Google Checkout.
One other difference, Google's App Engine is free for initial users, and appears that it may be free up to certain 'sizes'. This will make it very appealing as a beta/testbed for new apps, which then of course remain on Google as they grow.
One post I read (but forgot where) suggested that Google's approach will make it very easy for Google to acquire new startups as they are already built and running using the Google services and servers. While I doubt this is the main goal, it certainly does demonstrate some of the values Google can leverage if a large part of the 'net is building their applications with Google. One more step in Google becoming its own Internet.
Time to learn Python?