Google introduces App Engine, "a developer tool that enables you to run your web applications on Google's infrastructure. The goal is to make it easy to get started with a new web app, and then make it easy to scale when that app reaches the point where it's receiving significant traffic and has millions of users."

Arrington: "Google App Engine is designed for developers who want to run their entire application stack, soup to nuts, on Google resources. Amazon, by contrast, offers more of an a la carte offering with which developers can pick and choose what resources they want to use."

Dave Winer: "What PCs did in the 80s, Google is doing now. PCs took the black magic out of owning a computer. Now Google is taking the black magic out of operating a scalable web app."

Some good discussion here.

Related at CIO Insight: Nick Carr talks about the coming era of cloud computing and its impact on enterprise IT; a relatively early look at Amazon's service offerings.

A video about using App Engine (more here):