Have been checking out details of the Google App Engine given here. So what is this idea?
It is about simplifying all the processes associated with deploying applications. Once a developer finishes coding an application, the developer currently has to deploy and maintain it. If necessary, the problem of scalability also needs to be addressed. The LAMP stack could be used to minimize the costs involved but the costs will not be zero.
With the Google App Engine, once a developer finishes coding a web application, the developer can just deploy it on the App Engine. No costs involved. Nothing to deploy and nothing to maintain. And the Google infrastructure will ensure that your system will automatically scale when needed.
Of course, this is only for web apps and this also assumes you hand over your code to Google to deploy on the web engine. This means that large enterprises might not be able to go this route since they might not want to hand over their code to Google. The resulting cost savings might not be enough to justify this.
Of course, Google could provide this same service to enterprises but in this case the proper NDAs (non-disclosure agreements) and SLAs (service level agreements) need to be signed. If done, it can make the life of many enterprises easier while also providing another revenue source for Google. Heck, the operations team in many enterprises would become unnecessary.
This might still happen; what we see now could just be the first step towards generating revenue from a enterprise focused app engine. Hmm, but is that not what cloud computing is supposed to be about?