I've already explained why I believe Google's AppEngine could be a big deal if implemented well (still an open question). One of the open questions was price, though you could (and we did!) take a guess based on the original announcement. Well, now Google has released the pricing and it's pretty much what we expected: the platform is totally free for anyone who isn't driving that much usage, but as you ramp beyond a certain level, fees kick in. Those fees seem pretty similar to Amazon's fees (some minor differences, but not that many will notice). Assuming that the rest of the system works well, the free bottom end will hopefully lead to some interesting innovations. For developers, the only cost of building and testing a web app is their time. This effectively lowers the barrier for developing new web apps even further. For years there was talk about how cheap it was to develop web apps these days compared to a decade ago. With Google's offering, it's even cheaper.

If you've heard of HuddleChat at all, you already know about its demise. Put together by a few Google engineers in their spare time, the web chat application was used to showcase Google's newly-announced App Engine offering. There was just one problem: it was nearly identical to 37Signals' Campfire, a well-known SaaS web chat application. 37Signals gave some petulant quotes to ReadWriteWeb about the situation, and shortly thereafter Google pulled the app down.

As Om Malik has pointed out, this is all a bit ridiculous. AJAX/Comet chat is a fairly simple feature to implement. If my fellow participants in the Web 2.0 economy are counting on earning their keep via a collective conspiracy to make our jobs look harder than they are, we're all in deep, deep trouble. There's additional potential irony here, too, given that 37Signals has been accused of ripping off others' work to create Campfire in the first place.

But while this incident may prove portentous to the long-term prospects of the 37Signals business plan, it's hard to see how it could mean anything for Google. Breathless declarations that "many in the developer community [will] view Google App Engine as a Xerox machine for copycat product developers" are downright laughable. Google's decision to kill HuddleChat makes good PR sense, but it's inconceivable that many cost-conscious, Python-friendly startups would give up on App Engine over this minor blog imbroglio. As in many other respects, Amazon Web Services will likely provide the relevant template for these issues, and so far AWS has wisely avoided getting dragged into policing its users' apps.

Of course there's a lot of speculation that App Engine will include a free offering, and for that reason it may attract more troublesome users than EC2 currently does. But even if Google finds itself obligated to fight more griefers, phishers and spammers than Amazon does, it seems certain that they won't waste their time arbitrating squabbles over who called dibs on which trivial featureset. Sadly, that will remain for the courts to decide.

Way back in 2004, we started asking when Google was going to become "the web platform," finally opening up its infrastructure to build out new and useful applications. It seemed obvious at the time that the next real battle was going to be in that space, but time and time again, Google has missed opportunities to do so, opening up a window of opportunity for other players. Surprisingly, the closest to realizing the vision has been Amazon.com with its Amazon Web Services offerings -- which was something no one would have expected back in 2004. Back then, the questions were more about Microsoft, Yahoo and Google. Microsoft, however, can't seem to get past its desktop software DNA (though, it talks a good game) and Yahoo! (typical Yahoo!) has bits and pieces here and there but can't seem to pull together a comprehensive web platform strategy. For a brief period of time, it looked like Facebook might become a true web platform, but it's been too focused on locking apps in rather than enabling outbound efforts.

So, now, finally, nearly four years later, Google has come to its senses and announced its entrance into the web platform space with its aptly named AppEngine offering. In many ways, it's similar to Amazon's offering (which is a good thing!), though much more integrated, which could prove to be either a problem or a benefit depending on what you want to do. Amazon allows for a much more a la carte setup, which could appeal to many, while you have to really embrace Google to enjoy the benefits of its setup. A big open question is pricing. A huge part of the appeal to Amazon's Web Services platform is that it's crazy cheap. You really have to be working it quite hard to build up any sort of significant charges. Google hasn't released info on pricing yet, offering AppEngine up for free to the first 10,000 developers (who appear to have snapped up all the open slots in less than two hours). That free service has some limitations: initially 500 MBs of storage and enough bandwidth to serve approximately 5 million pages per month. There's some suggestion that the final service will always be free up to that level, with charges starting if you go beyond that. If so, that could certainly appeal to people who just want to try some stuff out for free.

While this may seem like something that will only appeal to serious techheads, this could be a really big deal. A lot is going to depend on how well AppEngine really works, and how open it really turns out to be. However, if it really does provide another super cheap (or even free at low levels) full service, highly scalable platform for all different kinds of applications, things could start to get very interesting pretty quickly. Between this and Amazon's Web Services, the very concept of developing online applications may finally start to change in significant ways for the better. The easier it is to develop and deploy highly scalable web applications, the more innovative and creative solutions we're going to start to see.