Don Dodge, Microsoft Google evangelist, sums up Google’s pitch to businesses -
Google has a two pronged approach for enterprises moving to the Cloud. Google Apps has packaged applications like Gmail, calendar, Google Docs, Google Sites, Video, and other commonly used applications. Enterprises can get immediate cost savings by moving these routine every day applications to the cloud, and free up IT resources to focus on more strategic issues.
Google AppEngine provides a custom development environment and scalable deployment infrastructure. Enterprise developers can build custom applications using the same systems that power Google applications, with built-in scalability leveraging things like BigTable and GFS.
At Conosco, we steer our small & mid-sized IT support customers away from any form of custom development – it rarely makes any sense for them. But the Apps suite is increasingly attractive, especially for startups, and it’s easy to move over to it gradually as Don says.