Google’s App Engine is, despite claims to the contrary, not a competitor to Amazon’s EC2 and S3.

As Silicon Insider correctly points out* the limitations in terms of a true “utility computing” service are simply too severe. We do a lot of our heavy lifting around here using EC2, SQS and S3, something we couldn’t possibly do with Google App Engine (and not because we don’t like Python, we do!).

What it is, is a beautifully played move against Facebook; it’s a simple way for developers to build applications that can harness the information that Google has about the end-user. How? Well, if Google are smart they are likely to expand the way in which Google App Engine applications can access other Google services (with the user’s permission of course).

This gives the applications an amazing amount of contextual information about each user, allowing developers to come up with the next generation of personalized, highly relevant and (with Open Social) social applications; all tied in with how end-users normally go about their online lives.

[* The Silicon Insider claim that “App Engine is designed for lightweight apps” is, however, plain wrong. Unless that is you consider applications like GMail and Google Reader “lightweight”]