Google has copied Amazon and wheeled out an EC2 Infrastructure-as-a- Service imitator at the Google I/O developer conference in San Francisco Thursday proving the scuttlebutt to be on the money.

It’s called Compute Engine and Google will rent out the spare stripped-down servers (Ubuntu 12.04 or the CentOS 6.2 Linux virtual machines with KVM) in its data centers to run compute-intensive third-party apps, putting its skills and gargantuan scale up for sale.

It claims it’s “50% more power per dollar” than Amazon, which recently trimmed its prices and now is likely to again.

Jealous of other people’s success and innovation, Google claims Compute Engine is not about stealing market share.

Google already has the platform-as-a-service App Engine and the S3-like Google Cloud Storage but the money is in IaaS. It’s said Amazon Web Services may do $2 billion this year.

Microsoft remade Windows Azure into a Linux-toting hybrid-supporting infrastructure-as-a-service vehicle a couple of weeks ago. Microsoft is tight with enterprise developers and both Amazon and Google want them. That’s why Amazon tied up with Eucalyptus and its private clouds.

GigaOM thinks Microsoft’s developer community is really Google’s target.

RightScale, Opscode, Puppet Labs, Numerate, the newfangled Cliqr and MapR are supporting the Google effort for purposes of management and interoperability. No surprise there.

Google can presumably count on getting some of the web and mobile start- up trade that play to its core search business and its other cloud services. It’s beta tested the service with customers like the Institute for Systems Biology, which is using it for a Genome Explorer app running on hundreds of thousands of cores in a search for cancer cures.

It’s offering normal people one-, two-, four- and eight-virtual core VMs with 3.75GB RAM per virtual core and storage on local disk, or its new persistent block device, or Google Cloud Storage, its Internet-scale object store. Naturally it’s got the networking for clusters.

RightScale CEO Michael Crandell said there’s automatic encryption of data – no arguments, a global private network connecting far-flung data centers, and consistently fast boot to which RightScale can contribute auto-scaling.

It’s out in limited preview for those in the US who want 100 or more VMs. When it will go global is unclear but by then users will just need a credit card. It’s unclear how many regions Google will have for Compute Engine and whether it’ll really be segregated from the rest of its infrastructure.

Compute Engine can be combined with App Engine, which is now supposed to host a million active apps.

See here. For pricing see here. Also see http://cloud.google.com/.