This competes head-on with Amazon‘s suite of web services. Google’s offering will be attractive because it does automatic scaling and load balancing. While Amazon-hosted apps are easy to scale, you have to roll your own load balancing, and that requires a little fiddling. With Google, it looks like you need not worry about scalability at all.

On the other hand, an application-oriented hosting service will likely be more limited than a server-oriented service like Amazon’s. Most likely, there will be a few limitations on which libraries you can use. For instance, they do not currently support threading.

So far, it’s Python only, although the platform is meant to be language-neutral. The question is: when can I upload my Java .WAR file?

Check out the Google App Engine blog