Amazon Cloud on Ulitzer

Their economy of scale will be difficult to match.

What about Microsoft - they are constrained by the fact that they have to defend their desktop business - which will prevent them from following optimal cloud strategy!

Cloud Computing Service

Value Proposition of Cloud Computing

Comparison between Amazon EC2 and Google GAE
Though different cloud service providers are following different strategies, these are the two uniquely different approaches. Others either are similar to one of these or fall somewhere in between.

I have excluded SaaS from this discussion - you can see the comparison between IaaS, PaaS and SaaS on this post on Cloud Strategy.

Amazon EC2 (Elastic Computing Cloud)

Google GAE (Google App Engine)

Base Technology

Virtualization

Existing Google infrastructure

Unit of Scalability

Dynamically instantiated virtual machines

Every transactions initiated by user

Every scheduled or queued task

Persistence

Reserved Virtual Machine using standard RDBMS

By directly persisting objects on to Google BigTable

No need for any object-relational mapping

Software License

All software license required

OS, RDBMS, Web Server, App Server ...

Behaves like a Service Bus of infinite capacity

Application code can be directly deployed

Readiness

Reasonably mature

Can be viewed as an extension to existing hosting services

Very much in Beta

Will take couple of years to mature

Best for ...

Application requiring heavy processing power for short duration

Startups wanting to start free and have the ability to scale when the venture succeed

Economics

Saving potential of 30-70% for the right type of application

Not clear

However, it can be an order of magnitude improvement

Innovativeness

Incremental

Potentially Disruptive

Why is GAE potentially disruptive?

Their economy of scale will be difficult to match.

What about Microsoft - they are constrained by the fact that they have to defend their desktop business - which will prevent them from following optimal cloud strategy!