Doesn't look good for Amazon.com and Oracle, which powers Amazon's SimpleDB.
Um, no, to the article and the rest of you.
The documentation makes it clear that the plan is to make the entry level system free beyond the temporary limitation of 10,000 developers.
Amazon sells books (and stuff) and is diversifying, bless them for that, and Oracle powers zillions of applications that won't be convertable to this for almost that many years.
Who this threatens is Rackspace and the like who start raking in the dough from small companies and start-ups who haven't even invested in a cabinet for their letterhead stationary yet.
During the previous cycle in the 90s every Avon sales-lady could have her own personal business page with the help of Geocities and all the follow-ons. Problem with all the free stuff was that it was just static pages, maybe augmented by a free forum or something.
Now the sky is the limit as far as your concept goes. You could re-invent Facebook (God forbid) with this without laying out a dime for servers and the only time you have to start paying is when you have enough traffic to actually test your monetization scheme (if you are cluefull enough to have one).
Yes, it's true that this will make cherry-picking the good apps easier for Google, but nothing is stopping several other companies from doing a similar deal. Bigtable, which is Google's super-scaleable stand-in for SQL (and looks similar to it from a programming point of view) is already being cloned in Open Source. Microsoft and Amazon have their own clones already. You could write cover functions to mask the differences if you wanted to be portable, and as mentioned above the other components are all already Open Source. They'll support other languages than Python RSN (Real Soon Now).
The immediate "victims", as I said, are Rackspace and the like, although I don't expect them to close up shop any time soon.
If we are lucky though the thousands of other fly-by-night (mostly middle-men) hosting providers (who often sub-let from Rackspace) will find that old door to door Amway business that they put on the shelf once again an easier row to hoe.
This is getting a lot of amateurs out of the business of running (or pretending to run) data centers.
Thank you. Thank you very much.