- jobs that can fit in 1.7 GB of RAM or less (Amazon's Small Instance has 1.7 GB of RAM and is about half the price than the cheapest Google plan).
- reserved heavy utilization jobs (compared to Amazon Medium 3.75 GB RAM Heavy Utilization Reserved Instances, Google is 100+ USD/month versus 35.65 USD/month for Amazon).
For jobs requiring 3+ GB of RAM and non-reserved utilization, prices seem to be about the same (and CPU performance seems to be slightly better for Google).
The Product Management question is: if not the price, then what? Without a killer Amazon feature, they're just going to play catch-up.
Maybe with the Google brand? AppEngine existing customers? Access to special data-sets or APIs? Future price drops? The later might be the most likely, once they reach scale, since their data-centers are famous for being energy-efficient.