Thanks. If I understand you right, it comes down to that GAE is counting the CPU on a per-request basis while EC2 is charging you per-hour - so if you load is highly variable (as many web startups would be) you get a big bonus because you're not billed for all the time between requests. If your load was heavy and consistent then it would be much more even.
I agree that it would much more even if your load is consistent and heavy, but if it gets too heavy you run in a lot of problems with EC2.
If you max out one instance, you would need to add another instance and as a result of that you would need a third instance as a load balancer.
So if we take the numbers from the example I gave above and assume your instance maxes out add 100k requests and you get 110k request your cost would go from $72 to $216 ($72 for the load balancer and 2* $72 for the web/application server). That is 3x more but only an increase in traffic by 10% Of course the same math applies to your database server.
GAE pricing scales linear no matter how big you are and you never have to worry about maxing it out. Of course you have some trade off's because of that, but that is what the article was about.
I guess it's a question how you define heavy traffic. I've read somewhere that Zynga runs 10,000 EC2, at that scale adding another instance wouldn't have a huge impact, but I think if you have less than 15-20 instances (which is still huge) you're cheaper off with GAE.
(Even though it sounds like I'm affiliated to GAE I'm not, I'm going to use EC2 because of the trade off's mention in the original article)
