The new service, which was announced at the Google I/O developers conference taking place in San Francisco, allows users to create virtual machines. Google says it provides 50 percent more power per dollar than Amazon's service. The technology giant had previously offered a wide range of services and products in the cloud , but not a pure rent-our-servers offering.

Limited Preview

Compute Engine is currently being offered in a "limited preview," meaning that only a limited number of users can sign up. A general availability date has not been announced. Google said its service, even in this limited launch, is well suited for computationally intensive tasks, such as scientific research, because of its ability to scale to thousands of processor cores.

On-demand Linux virtual machines are offered in one, two, four, and eight virtual cores, with each virtual core having 3.75GB of RAM. Storage will be on local disks, persistent block devices, or in Google's Cloud Storage. Pricing starts at $0.145 per hour for a 1 core, 3.75 GB RAM virtual machine.

On the Google Compute Engine Web page, the company cites three initial use cases for its service -- batch processing, data processing and high-performance computing. Users can manage their projects via the Google APIs Console.

Google's App Engine, which provides a platform for developing applications, had pointed to this IaaS opportunity, said Urs Holzle, the company's infrastructure architect. Holzle told the conference that users of the App Engine, which does not offer pure use of virtual machines, had indicated their desire for an infrastructure service that provided virtual machines for long-term use.

Linux Only

App Engine requires that applications be designed for specific application programming interfaces, while Compute Engine will allow users to develop and run almost anything they choose.

A variety of new features for the App Engine platform were announced Wednesday, such as the ability to work with geospatial data. When it launched in 2008, App Engine only supported applications written in Python, but later added other capabilities, such as support for Java.

Google will handle scalability and performance issues in Compute Engine, and will utilize its extensive, worldwide network of data centers. Initially at least, Compute Engine will only support virtual engines running Linux, in contrast to Amazon, which supports both Windows and Linux.

In addition to Amazon, other IaaS competitors include AT&T , GoGrid, Softlayer, Rackspace, Hosting.com, and Verizon's Terremark. Amazon is the market leader in this category, having undertaken these services six years ago and currently providing services to thousands of established and start-up companies. By some estimates, Amazon's services may power as much as 1 percent of the entire Internet.

Compute Engine becomes part of a group know as Google Cloud Platforms, which includes App Engine and the company's Cloud Storage service.

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