We see the two as being complementary. App Engine is Google’s Platform-as-a-Service offering and Compute Engine is Google’s Infrastructure-as-a-Service offering. App Engine is great for running web-based apps, line of business apps, and mobile backends. Compute Engine is great for when you need more control of the underlying infrastructure. For example, you might use Compute Engine when you have highly customized business logic or you want to run your own storage system.