What is Compute Engine? What can it do?

Compute Engine is an Infrastructure-as-a-Service product offering flexible, self-managed virtual machines (VMs) hosted on Google’s infrastructure. Compute Engine includes Linux and Windows based VMs running on KVM, local and durable storage options, and a simple REST based API for configuration and control. The service integrates with Google Cloud technologies such as Cloud Storage, App Engine, and BigQuery to extend beyond the basic computational capability to create more complex and sophisticated apps.

What is a virtual CPU in Compute Engine?

On Compute Engine, each virtual CPU (vCPU) is implemented as a single hardware hyper-thread on one of the available CPU Platforms. On Intel Xeon processors, Intel Hyper-Threading Technology allows multiple application threads to run on each physical processor core. You configure your Compute Engine VMs with one or more of these hyper-threads as vCPUs. The machine type specifies the number of vCPUs that your instance has.