My prediction: Azure will look like a 100% clone of AppEngine very soon. Very very soon. Meaning per page invocation, cron (task-scheduler) API, memcache API, a NoSQL database, and most important: no talk about instances, roles, routing, and the like. In other words PaaS not IaaS. I am aware that Microsoft is calling Azure PaaS and I don't understand why. But then my acquaintance with Azure is only superficial. Maybe someone can enlighten me.
I think Microsoft's error with Azure is that it's trying to take the single-server paradigm to the cloud. It might win the support of current-generation .net developers (and also PHP devs) who are used to managing servers, but Google's approach is more logical if you're making a site with a view towards scalability. you know, Google knows a few things about that .