I think the bigger implication of this is not that the costs for startups are now 0. The couple of bucks for a hosted server should not have been that much of an impedient for a startup.

Rather, this enables a new category of applications, personalized web applications for non-programmers. Instead of getting a blog on wordpress.com, in the future I will upload a wordpress image to google. Eveybody can have their private bug tracker easily now. And so on. I think there will be opportunities for new applications, or for enhanced user-friendliness of existing applications.