OK, It's hosting, with a fast upgrade/downgrade/deployment cycle.

...which is why we call it something different. Sure, "cloud" is an overhyped buzzword, but you've gotta' choose your battles.

The absolute key thing is that you can do this with an API and pay by the hour! I think the proper term is utility computing and amazon launched the cloud meme with EC2...

True.

>> "...and pay by the hour"

If you have money to burn.

Being able to pay by the hour massively, massively reduces the capital expenditure required when launching a public site? You can launch on a relatively cheap $75-$150 a month and then if you get Slashdot/Digg your code can automatically scale and only pay for the extra capacity when you need ... that's kind of the point of the service. Check out Bezos at startup school last year talking about animoto : http://omnisio.com/startupschool08/jeff-bezos You can't expect to launch a public site with no budget! It's only a few thousand to support this sort of thing. If you launch unprepared to scale, you are just asking for someone with funding to rewrite your stuff.

Some languages/frameworks etc scale better than others. Making that choice is very important. $75-$150/mo is quite a lot really unless you're getting lots of traffic.

I can see the case for this sort of scalability if your traffic is wildly unpredictable - eg 1 visit one day, 100,000 visits the next - but I think that's rare.

However you slice it, $150/mo is only $1800/year. Let's say you want to launch some new site targeting the public consumer internet where you would like to see hundreds of thousands of people on your site. You're not going to get there first. You have two options - either put forth the engineering effort to properly test your server and get it to scale up to the many thousands of concurrent level or launch in a series of betas with increasingly more people. There is certainly a case for getting the software ready, launching it and then doing a marketing push and if you get a hit on some major service, the site is ready to go - I think it puts forth a more professional air. Now, I have reviewed slicehost more since this discussion and there may be a significant way to reduce cost there... but it is also not as feature rich as the whole AWS suite.

VPS hosting? Though that doesn't cover GAE and Heroku style hosting.