At the Google I/O conference in San Francisco, Google has announced the immediate availability of Compute Engine, an infrastructure-as-a-service (IAAS) product that directly competes with Amazon EC2 and Microsoft Azure. Citing more than a decade of running and optimizing its own data centers and network infrastructure, Google is claiming that the Compute Engine is more scalable, more stable, and cheaper than the competition.

For this story, we’ll focus on scalability and cost (I’m sure that Compute Engine is stable, but Google just hasn’t given us any figures to work with). Google says that Compute Engine has access to 770,000 cores — a figure that will surely grow over time. In one demo at Google I/O, a genomics app (it analyzed the human genome) was shown to use 600,000 cores. These cores are made available as Linux virtual machines (VMs), with 1, 2, 4, or 8 cores each. Each core apparently has access to 3.75GB of RAM each — and, of course, each VM is connected together using Google’s advanced networking technologies and topologies.

777,000 cores, assuming the entire Compute Engine cluster consists of 8-core CPUs, equates to 96,250 computers. This is a huge number — probably equal to the total number of servers operated by Intel, or data centers such as The Planet or Rackspace, but considering Google is estimated to have more than 1 million servers in total, it’s not that huge. Amazon EC2, by comparison, is estimated to have around 450,000 physical machines. Still, almost 100,000 servers on your opening day is rather impressive; Google is obviously starting as it means to go on.

For an interesting reference point, Sequoia, the world’s fastest supercomputer, has 1.78 million cores (clocking in 16 petaflops). Number two, the K computer, has 700,000 cores (10.5 petaflops). During that Google I/O demo, by using 600,000 cores, that genomics app was probably hitting the Compute Engine for somewhere between 1 and 10 petaflops of computational power — between 1 and 10 quadrillion calculations per second. For a few moments, the Compute Engine was probably the third fastest computer in the world.

But at what cost? The Google Compute Engine website says that an 8-core VM with 30GB of RAM costs $1.16 per hour. For 600,000 cores, you need 75,000 VMs — so, $87,000 per hour, or $2 million per day (and that’s before bandwidth and I/O costs). Even so, that price is actually quite reasonable, when you consider that supercomputers generally cost tens of millions to install and millions per year in running costs — well, as long as you don’t need the Compute Engine for more than a few days per year…

Finally, compared to “other leading cloud providers,” Google is claiming that Compute Engine gives you 50% more bang for your buck — though the company didn’t go as far as calling Amazon or Microsoft out. A quick glance at the Amazon EC2 pricing page suggests that Google’s $1.16/hour is actually more expensive, but perhaps it isn’t an apples-apples comparison.

Read more about the size of the cloud — or the size of porn sites