Paul Graham has a saying: 'Startups are never killed by competition. They die of suicide.' If your service is useful, people will continue to use it. (I use it, and was pointed there by Dotcloud).

Google App Engine isn't really your only source of business, is it? Was it ever? Just go after a different community.

Differentiate, ignore Google, and move onward and upward. SSL for the cloud is definitely useful.