Google has made a bolder move into web application hosting, unveiling the preview release of its Google App Engine service.

The Google App Engine allows developers to build web applications on the same systems that power other Google applications, affording good scalability without needing to worry about infrastructure. For those who are familiar with the Python programming language, Google App Engine offers far greater flexibility than Google's existing free hosting service, Google Pages.

In contrast to Amazon's EC2 service, which now offers scalable hosting through Elastic IP Addresses and Availability Zones, Google App Engine allows developers to get started with its service for free. Google's site claims that every Google App Engine application can use up to 500MB of storage and enough bandwidth and CPU for 5 million monthly page views.

With Amazon's recent offering of low-cost web application hosting, and now Google's free web application hosting, the conventional web hosting industry may be set to see some radical changes. With both services providing high scalability, yet without adding complexity, these could be seen as an attractive alternative to setting up a busy website on dedicated servers. Conversely, they are less likely to appeal to casual website owners, simply because the services require more knowledge and skill to use than simpler services such as Google Pages, Blogger or Apple iWeb.

The account registrations for the current preview release are limited to the first 10,000 developers, and only free accounts are available. Up to three applications can be created with a single Google App Engine account, and a number of applications have already been developed and are available at appgallery.appspot.com.

Google App Engine currently allows developers to write applications using Python 2.5, with some modules disabled for security reasons. A number of Python web frameworks will work on Google App Engine, and Django is included with the SDK for convenience.

Applications written for Google App Engine are not permitted to write to disk; instead, all data is stored in the Google App Engine datastore. A language called GQL uses SQL-like syntax to interface with the datastore. Scalability is achieved by using the Bigtable distributed storage system for structured data. The same storage system is used by a number of other popular Google projects, including web indexing, Google Earth and Google Finance.

The Google App Engine team have set up a new blog for the service at googleappengine.blogspot.com

Amazon has made a significant and much bolder step into the web hosting arena, extending its Elastic Compute Cloud (EC2) service by introducing Elastic IP Addresses and Availability Zones.

The Elastic IP Addresses allow Amazon Web Services users to set up static IP addresses, making it easy to host websites, web services and other online applications using Amazon EC2. Users can programmatically map the static IP addresses to any of their instances, making it easy to recover from instance failures.

By default, users are limited to a total of 5 Elastic IP Addresses, although additional IP addresses can be requested from Amazon. To ensure customers use the Elastic IP Addresses associated with their account, a $0.01 per hour charge is applied when each IP is not mapped to an instance.

The Availability Zones feature makes it easy and relatively inexpensive to operate a highly available internet application. Availability Zones are designed to be protected from failures in other Availability Zones, so by spreading an application across several zones, it can be better protected against power failures or network downtime.

This is not Amazon's first foray into web hosting - a number of high profile sites have been working with Amazon's Enterprise Solutions group for a few years, including Marks and Spencer, which signed a deal with Amazon in 2005. Amazon were to provide the technology behind the Marks and Spencer website as well as systems for customer service and ordering.

Other companies that are hosted by Amazon include Timex, Sears Canada and Benefit Cosmetics.

While the complexities of web hosting with Amazon's EC2 platform may appear rather daunting to the majority of web site owners, the service will no doubt appeal to existing owners of dedicated servers who want further scalability or wish to make their sites highly available at a reasonable cost.

Amazon's pricing for the EC2 service depends on a variety of factors. A single default "small" instance, with 1.7GB of memory and 160GB of storage, costs $0.10 per hour to run, with additional charges for data transfer and unused Elastic IP Addresses. An extra large instance costs $0.80 per hour and features 15GB of memory, 1690GB of storage and 4 virtual cores.

Internet data transfer costs depend upon the direction of the data. All data transfered in is charged at $0.10 per GB, while outwards transfers are $0.18 per GB for the first 10TB of data each month, reducing to $0.13 per GB if 50TB is exceeded.

With EC2's bandwidth costs significantly undercutting many hosting companies, Amazon's latest move will be sending shock waves throughout the conventional hosting industry. It will be interesting to see how the use of Elastic IP Addresses grows, as high bandwidth websites - or even entire hosting companies - are tempted to migrate to a cheaper alternative.

Swishmail and iWeb are the most reliable hosting company sites for December 2007, closely followed by DataPipe, 3FN and Go Daddy.

Swishmail's US-hosted website is powered by FreeBSD, Apache and PHP and they offer a variety of professional and enterprise web hosting plans in addition to email hosting. iWeb's site is hosted in Canada, offering dedicated, shared and colocation hosting as well as domain registration services.

DataPipe appears in third place in December, marking its 11th appearance in the top ten during 2007 - an impressive feat. November was the only month where DataPipe did not reach the top ten. 3FN makes a forth place appearance in December, falling from 3rd place in November, while Go Daddy appears in 5th place.

Only two of December's top ten hosters run Linux, including iWeb, while four run FreeBSD. Two of the hosters run Windows Server 2003, while another uses Windows 2000.

Rackspace Managed Hosting will invest $100 million to transform a vacant San Antonio shopping mall into its new headquarters, and plans to add 4,000 new employees over the next five years. The plans were announced this week as part of a deal to keep Rackspace in the San Antonio area, which included a $22 million grant from the Texas Enterprise Fund.

Rackspace is finalizing an agreement to lease the Windsor Park Mall in Windcrest, a suburb of San Antonio. The company has called San Antonio home since it was founded by three students from Trinity College, and organized as Rackspace in 1998.

"The Governor's Texas Enterprise Fund grant was the key factor in Rackspace's decision to keep its company headquarters in San Antonio and build out a new campus within Windsor Park Mall," said Graham Weston, executive chairman of Rackspace Managed Hosting. "We look forward to San Antonio being our home for years to come."