IBM DeveloperWorks just posted a fantastic article on how to create a simple application for the Google App Engine cloud infrastructure.
See: https://www.ibm.com/developerworks/java/library/j-javadev2-1/index.html
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Looking back around 9 years ago when I was fairly new to the Web application land -- the cost of what is currently being offered by Google App Engine for near free easily ran into many thousands of dollars (software/hardware/routers alone were well over $20k). Further, if you setup custom infrastructure you end up needing Network administrators (part-time contractors at a minimum), system administrators (to patch O/S and monitor infrastructure) -- this skilled work added to the underlying costs as well. If you had a good concept and wanted to take it into the Internet land -- you would have spent $200k - $300k just setting up the IT infrastructure and hiring the engineers to look after it. Of course the hardware and software depreciates exponentially. In the early days start-up companies still setup and ran their own e-mail servers (most of the time very badly managed).
I still recall attending an auction a few months after the dot.com collapse -- $25k Sun Servers were being sold for less than $5k (including all the software on it -- but no one realised the legal implications of transfering the software license). The irony at the auction was that the only items that held value were the fancy furniture many of these startup's bought (at least you did not need a $100k engineer to maintain them).
The new cheaper infrastrucutre world (not to mention the reduction in deployment and maintenance costs) will contribute towards a reduction in overall IT costs -- but, the real benefit is that it allows developers with good idea to translate them into software and make it available at a farily low cost.
The side effect of all this is that the developers can come from any part of the world, the infrastructure capital requirements are now sufficiently low that skilled engineers from a lot more countries (I'm thinking India, China, Eastern Europe, Russia, Brazil) can create software and compete for market share. Will this oppertunity be taken up .... I do not know the answer, but we will soon find out.
-- rv
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