Here's a copy of a post I made in a zdent MaryJo article:
AppEngine seems to me years ahead
I admit my knowledge of Azure is from videos on Microsoft sites, but from what I see, Google's offering is years ahead. Google's solution IS PaaS. When you watch Azure videos, they claim it's PaaS, but it's a weird PaaS/IaaS mix. You hear talk about _routing_, instances, and whatnot. Not even funny. Google's approach and advice is simple: 1) don't use SQL, as it is not easily scalable. Use a NoSQL server from the start. 2) Write a web-page and Google will scale it. Simple. Smart. And did I mention CHEAP! You can run a medium traffic site for FREEEEEE.
So if you aleardy have an SQL site up and running, you might want to give Azure a look, otherwise by going Azure you'll just create something that you'll have to rewrite tomorrow (as a microsoft developer i bet you're used to that).
My prediction: Microsoft will copy AppEngine to the letter, replacing Java with dotnet. Microsoft developers, why wait? use AppEngine today
So, you are effectively saying that Google's solution is super-duper-dee-awesome and it's FREE, but you'll need to rewrite your application so that it doesn't work with a relational database and you'll need to 'Write a web-page' whatever that means.
You are, at best, oversimplifying this comparison.