How much of Google's cloud stack are you required to use to apply for this program? If they require you to use GAE for your backend for example, I think it's going to be a dealbreaker for a lot of startups.
You can run your GAE workloads on AppScale on your own infrastructure (or on GCE, AWS or whatever IaaS you choose).
For everything that GAE can't do, we have a GCE instance running to handle it.