It depends on what you mean by small. Many apps will still be able to run 
for free on GAE. But yeah, as soon as an app goes beyond the free quotas 
then the pricing may be way too high.

And companies developing larger applications may not want to use GAE because 
of the limited datastore functionality. So I'm not sure exactly what kind of 
customers Google is targeting with GAE. To speculate a bit: Yikes, maybe 
Google now has too few large customers and that they now on purpose have 
chosen to kill GAE, because they see that they will never have enough large 
customers whatever they do and whatever price model they use.

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