I honestly have no idea what Google's intentions are, I myself am very
new to web2.0, the cloud, ajax, etc.  But in my limited experience
with app engine so far I'd say it's an excellent platform for small
specific purpose applications, say the type of app created by a
developer in there spare time.  I would of never attempted to develop
the app I'm currently working on without knowing that I could host it
free on the app engine framework.  Would I recommend using it for a
large scale production system, hmmm, probably not yet, but that's
really only due to the CPU quotas.

In future I believe we'll start seeing a lot more small applications
that may not have existed had it not been for free hosting services
such as app engine.

Bouncing off the CPU limits is frustrating, but it does make you focus
on efficient design up front.  Agreed scalability may not be necessary
for 99% of apps developed, but I feel better knowing that my app can
scale if it ever gets the traffic I hope it will receive.

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