AppFog sent out an email announcement a couple of days ago that made my jaw drop. AppFog is one of the commercial implementations of the open source CloudFoundry PaaS (Platform as a Service). I blogged briefly before about CloudFoundry: it's one of the new generation of PaaS that do not lock you in with vendor-specific APIs. You can provision a standard DB service, upload a war and watch your application go live.
So AppFog is a commercial offering of an open source PaaS over generic public infrastructure: sounds about as generic as it gets, right? The difference is in their business model: calling themselves the "GMail of PaaS", they intend to shake up the market in the same way. Remember GMail? It arrived as a free email service with virtually unlimited storage. Suddenly, the idea of a paid email service seemed ridiculous. AppFog's announcement is comparable. The part of the announcement that made my jaw drop is the price: free for an application with 2GB of RAM, 1GB of DB storage and a 50GB transfer limit. By contrast, Jelastic's prices at ServInt work out to $14.40 per 128MB per month. The next step up is a $100/month plan, but the free plan alone is so generous many users won't need anything more. AppFog could kill the VPS market altogether.
There are details I'm still not clear about. For example, the default infrastructure is Amazon's AWS: is the disk storage the EC2 ephemeral storage that disappears when an instance shuts down or is that EBS or S3? Of course, you also have other infrastructure options: HP's OpenStack, Microsoft's Azure (no Java) or Rackspace. Moreover, I'm still skeptical about how AppFog intends to make money. They made vague noises enterprise customers, but the fact is their free product will be very popular. And while AppFog will not charge you money, AppFog itself still has to pay Amazon for the infrastructure. Still, why look a gift horse in the mouth? One thing is for sure: the PaaS market will not be the same again.