With Google’s developer conference due to kick off this week, rumours are afoot that the internet giant is preparing to announce the launch of an expanded batch of cloud services.

Google I/O opens on Wednesday in San Francisco, and a number of leading industry commentators have reported that the company will announce a new IaaS offering, in addition to its existing App Engine and Google Cloud Storage facilities.

On Friday GigaOm cited ‘multiple sources’, claiming that Google was planning to launch a competitor to Amazon’s successful EC2 IaaS service. Such a service was rumoured to be in the pipeline back in May, but wasn’t initially expected until the end of this year.

If the rumours are correct, the launch would mean Google going head to head with both Amazon and Microsoft, which is also believed to be preparing an IaaS cloud offering that would constitute a …