I want to continue to use GAE. I understand the value immensely, and I 
invested a whole year into building a significant codebase around it and its 
limitations without caring about lock-in. If I can help keep Google honest 
and encourage them to revise their pricing so it is more palatable, then I 
am a happy camper. The alternative (re-writing my code and taking on some of 
the scalability features GAE gives me for free) is very unattractive. 

Having said that, I think the datastore in GAE is the biggest selling point 
which is hardest to reproduce. This is what is distributed geographically. 
However, the price for that is separate from the hosting. The hosting is a 
compute instance (with CPU and RAM) running your code on a simplified and 
uniform stack. I think there should be a premium for the hosting, but a 4X 
to 8X should be explainable to the customers or revised. 

To your points (and I am making assumptions here just to respond to your 
points):
- HR is charged separately from hosting (so should not be factored into why 
the GAE hosting is significantly more expensive)
- simplification of stack to just app code makes operator management and app 
scaling easier for the admins, not harder (I worked with BEA/Oracle team 
where we created the JVM without OS, and that was a big selling point that 
Ops became much cheaper. It makes it cheaper than what u get for managed 
hosting.)
- isolated instances (ie the instances don't communicate or know about each 
other) makes app scaling easier, not harder. (contrast with your typical 
J2EE app server where instances communicate via multicast or unicast and 
keep config and stuff in sync and auto deploy in live instances and maintain 
sessions in-process, etc).
- I read somewhere that all app instances share the same memcache instance, 
and there's no guarantees on anything, so memcache implementation in AE is 
pretty simplistic, and can easily be reproduced on a VPS

GAE main expensive piece is in the datastore scalability and features built 
on it, and that is charged separately. Most of the other bundled features 
which can be charged are charged separately. 

In summary, I'm not underestimating the GAE value (at all). I worked at 
BEA/Oracle for 10 years with WebLogic in engineering and with customers (I 
left last year to focus on some startup ideas) and appreciate the simplicity 
of the GAE model. I just think that a 4X or 8X cost against AWS seems like a 
high premium, and it would be nice to see some justification/explanation in 
Greg's response.

NB. Regarding AWS outage, this was caused by storage problem, not the actual 
EC2 instances. The closest analogue in GAE land is the datastore, which is 
priced separately from hosting. 

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