Good news for the people at Heroku (Salesforce just paid 200+ million for the company). This is definitely a kick up for platforms as a service. I have long considered Heroku to be the best platform as a service offering because it is so developer friendly - very different from AppEngine which I would label as "scalability friendly."
I had to recently make a decision between developing for Heroku or AppEngine for my new business ideas (consultingwith.me and consultingwith.us). Heroku and Ruby on Rails, along with all of the useful plugins and auxiliary services offered by Heroku, make the most agile web application development and deployment story right now.
In contrast, developing for AppEngine is a pain in many ways. That said, I think that the new AppEngine SDK and services are a solid improvement and since I hope for more than small scale success the relatively inexpensive hosting costs and automatic scalability of AppEngine won me over (at least for these projects).
Infrastructure as a service is also becoming more accepted. My largest consulting customer is considering hosted infrastructure options for very large high performance datastores. As easy as it is to set up a cluster using MongoDB, HBase, or BigCouch, etc. there are so often good business and technical reasons to pay specialists companies to do it for you.