Not sure what you mean by lack of proper database layer. The AppEngine datastore is a different beast than the usual SQL relational database, but it still has

Not sure what you mean by lack of proper database layer. The AppEngine datastore is a different beast than the usual SQL relational database, but it still has reasonable queries, sorts, etc. (Better than Amazon's simple DB IMHO.) Main issues for a startup using AppEngine: 1) Quotas. Until they let you pay-as-you-go, AppEngine isn't really production ready. There are file # limits and quotas you may trip, depending on your target market. Google says they'll open things up by the end of this year. 2) Processing issues. AppEngine isn't a good platform for CPU-intensive processing apps. Transcoding videos, for example, is kind of a no-brainer for Amazon EC2 versus AppEngine. I think the AppEngine team is working on background processing systems but nothing is public yet. 3) HTTPS. There's none right now. You can use Google authentication, so that's one workaround but this is a deal-breaker for a number of possible apps. These are the main ones that jump out at me. On the positive side, I think it's awesome to outsource significant infrastructure issues (servers, DB) to Google. I've got too much to code as is, so I'd much rather delegate the chunks I'm not as competent or interested in. I'm not as concerned about lock-in, although I understand how others may take a different viewpoint. Also, tethering yourself to Google may have some repercussions if you are trying to get acquired by one of their competitors. (But I think you should just worry about your business first and not the exit strategy.)