"We’ve effectively hired them to deal with managing the hard parts of our scaleability infrastructure and they are working for a fraction of what it would cost to do this ourselves."
This, in my mind, is the most insightful line in this post. When cloud hosts like Heroku and GAE are discussed on HN often there is cost comparison between using them and doing the sysadmin yourself on Amazon, or on your own hardware. But what doesn't figure in is that with Heroku and GAE (I suppose more with GAE) is that you aren't just getting out of doing your own sysadmin work, you are also getting out of doing a lot of scaling work yourself. This is expensive, difficult work. Of course it is the type of work that many of us here salivate over, but that's another issue... ;)
It may be expensive, but you don't have to do "scaling" right now. A startup doesn't even know the business requirements or bottlenecks yet, how can it even begin to talk about scaling?
Scaling on GAE really works because of all the restrictions, and nothing stops you from restricting yourself in a similar way, e.g. in a similar vein the FriendFeed people have done: http://bret.appspot.com/entry/how-friendfeed-uses-mysql
The sysadmin part is also easy when you've got only 1 or 2 servers to worry about, the hard part of doing sysadmin is also when "scaling". Personally I can get an initial EC2 instance up and running in 2 hours tops, and then I can and have been automating that.
I've also worked on GAE apps, and from my experience the sysadmin stuff is replaced by at least 3/2 as much developer time, and this for trivial stuff.
Sorry for the analogy / bad language, but do you know what else scales? Fucking in the ass, i.e. no unexpected pregnancies, but that would be a stupid suggestion to make, wouldn't it?
At the moment, it's a tradeoff. Google App Engine frees you from operations but requires more development time. A VPS like EC2 requires less development time but a lot more operations time.
It's good to have the options but there's no silver bullet yet.
This, in my mind, is the most insightful line in this post. When cloud hosts like Heroku and GAE are discussed on HN often there is cost comparison between using them and doing the sysadmin yourself on Amazon, or on your own hardware. But what doesn't figure in is that with Heroku and GAE (I suppose more with GAE) is that you aren't just getting out of doing your own sysadmin work, you are also getting out of doing a lot of scaling work yourself. This is expensive, difficult work. Of course it is the type of work that many of us here salivate over, but that's another issue... ;)