At Google IO it was announced that this year that Google App Engine will come out of "preview" and add additional features and an SLA. Sounds great, but it also seemed like a lot of this hype was to try and downplay something else that was changing... the prices. As the service comes out of preview, it needs to be able to sustain itself financially. That means, price increases! (full details here)
The most significant change to me is the shift from charging for "CPU hours" being actual hours worth of CPU cycles (for a "standard" CPU), to being "your app being live for an hour, even if it uses 0 CPU". This is how most of App Engine's competitors work, and actually the reason I always thought Google App Engine's prices were so reasonable for small apps.
The problem with this model is that if you have a very low traffic application (which, let's face it, is how most apps will start out), it costs you almost nothing. In fact, for the few years this blog has been running on App Engine, I haven't paid a single penny. Even on a day I received 50,000 visitors, I didn't break the free quota despite my application being scaled across 4-5 instances for most of the day. My CPU use was so low, it was measure in minutes!. This made App Engine an ideal place for trying out ideas, because it was really cheap. And let's face it, if your idea takes off and it's already hosted on App Engine, you're unlikely to move away, so it was Win/Win, both for you, and Google.
The alternative model, which App Engine is soon to adopt, is that your low-traffic app is being charged just for being "live". This is the reason I've never set anything up on Azure or EC2. It costs you the same if you get 0 visitors in a month, as a single-instance application getting moderate traffic.
This change has another implication for small apps. No more free scaling. Previously, your application could scale out to a number of instances for periods of the day and you could stay within the free quota. Now that the free quota will be only 24 CPU hours, it's impossible for your application to burst out of a single instance without incurring a cost.
Note: The new pricing page lists "Dynamic Scaling" under the free version, however unless you're prepared for your application to be available for less than 24 hours in a day, I don't see how this could possibly be achieved. It's possible this refers to it being possible, though extra charges will apply.
This might not sound like a big deal - competing services already charge like this anyway (and some don't even have free quotas), however for me, this is more significant. I'm a .NET developer by trade. I'm not a huge fan of Java or Python, but App Engine's pricing was so good, it went some way to outweighing the use of .NET. Now that the pricing is the same, it doesn't really make sense as a .NET developer to give up all the benefits of the development environment/frameworks I'm used to using (and the productivity boost I get from them).
My current thinking is to move my apps over to AppHarbor, but once they're written in .NET, Azure and EC2 are probably also possibilities if AppHarbor doesn't work out. First project, this blog!