It is sort of an AWS competitor though there may be more (or less) to it than that (over time). It is an IaaS. I had recently blogged about the rumors that this may happen.
Long thread on Hacker News discussing pros and cons of Google Compute Engine vs. competitors such as Amazon AWS/EC2:
http://news.ycombinator.com/item?id=4172922
- Vasudev Ram
www.dancingbison.com
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