Amazon is the cloud to beat, but Google has the cloud to watch. Here’s why.

Amazon(s amzn) Web Services is by far the biggest and most experienced public cloud provider. Accepting that, the next question is: what cloud vendor can give AWS a run for its money? Increasingly the money is on Google(s goog)  — at least in compute capacity where Google Compute Engine is becoming a force to be reckoned with even though it launched (in beta of course) just last June.
Scalr is clearly a big fan, but even if you don’t buy its rather impressive report card, there are other reasons that Google Compute Engine should be considered the biggest potential rival to AWS.
Google Compute Engine vs. Amazon EC2

Google knows from scale

Even Google bashers will concede that the company understands massive scale. It has the data center fire power; it has the software tools to harness that power; and it has a deep engineering bench that includes several key hires from — you guessed it — AWS. A quick LinkedIn search shows some of these hires, but omits many. One of those is Sunil James, who worked on the AWS Virtual Private Cloud and Direct Connect and who now heads up networking services and technologies for the Google Cloud Platform.

Multi-cloud strategies demand a back-up cloud

As big and great as AWS is, most existing and potential business customers will not lock into a single cloud provider. They are still bruised from the current generation of vendor lock in. On the other hand, they can’t afford to support too many. “You can only make so many bets, and it’s clear that Google is in this public cloud game to stay,” said one vendor exec who would not be named because his company does business with Amazon.
Companies who made early bets on GCE are Cloudscaling, the OpenStack player which said last fall it will support both the AWS and GCE APIs, and RightScale, a pioneer in cloud management and monitoring that signed up as GCE’s first reseller in February.

Google is serious about GCE

Let’s face it: Google does have a bit of a credibility problem for launching, then deep-sixing services. (Hello, er, goodbye Google Reader.) But no one can seriously doubt that GCE is a priority any more.
“This is no skunkworks. This is not some little company they acquired. There’s a big team on the engineering side and if you look at the data center footprint, the fiber, the tech expertise, the internal platform and tools, they are serious about this,” said the vendor exec.
Dan Belcher, co-founder of Stackdriver, a Boston startup, said the time is ripe for an AWS contender to surface. The industry, he said, appears to be waiting for someone — Google? Rackspace? Someone else? to challenge AWS.
“Clearly, Google’s strategy is to differentiate on performance (overall and consistency thereof,)” he said via email. “Our first test suggests that they are delivering on that promise … so far,” he noted. He also pointed out that GCE’s admin console UI needs work and that less than a year in, there are limited services and features compared to AWS. A new Stackdriver blog details its first impressions of GCE.
The big question is how performance will hold up when the service actually leaves beta and opens up to the real world. There are reportedly tens of thousands of users queued up and ready to jump in when that happens. “Sure it feels fast with my six instances in limited preview. How will it feel when I am sharing with the rest of the world? And what has Google done to limit the host, network and API contention that plague large AWS customers?” Belcher asked.

Lack of legacy baggage helps GCE

Microsoft Windows Azure is paying the price now for Microsoft’s huge installed base of Windows and .NET legacy applications. While it’s done a good job incorporating support for open-source technologies under the Azure umbrella, that support is not on par with Windows, at least when you ask developers outside the .NET world.  Microsoft remains”weighted down by its Windows and Office mentality,” said one vendor who weighed supporting Azure but decided against it. “There are aspects of Azure that are technically superior but then their APIs are atrocious,” he said.

On the other hand …

AWS: ReinventSkeptics will always wonder if Google’s heart is in anything other than internet search and advertising. And, Google, like AWS, is not particularly known for working well with others in the partner community.
The other issue is that while Google Apps has gained traction in business accounts — largely because it’s so much cheaper than Microsoft(s msft) Office —  one long-time Google watcher wonders if it will ever “get its enterprise act together.”  In his view, Google Enterprise Search appliance never got traction so Google has to prove its credibility outside internet search.
Going forward, Google will also have to offer a more comprehensive menu of services. And, most importantly, it will have to bring more enterprise workloads on board so all of those companies looking for an AWS backup (or alternative) can really put GCE through its paces.
We will be talking about public and private cloud adoption, gating factors to that adoption, and other hot-button topics at GigaOM Structure in San Francisco in June.