Here is how cloud computing is going to swamp traditional software into irrelevance:
First came Web 2.0, followed closely by Enterprise 2.0.
Members of Generation Y are entering the workforce in increasing numbers, bringing with them a 21st century version of the work ethic. They believe in working hard for long hours, but also in mingling work with pleasure. Pleasure as in browsing videos or chatting with friends.
So Gen Y brought Web 2.0 into the workforce, and smart managers adapted rather than fight them. The iPhone phenomenon is only one example of this amalgamation of forces: it's popular because it integrates pleasure and utility more gracefully than any other smart phone.
The App Store is driving even more Web-based application development than ever--and that's an incredible statement in itself. The nascent software-as-a-service industry has grown from plucky upstart to business-as-usual in less than two years, creating enormous opportunity for Web developers on a plethora of platforms, from Silverlight to Air, not to mention Chrome and iTunes.
There is no doubt that the ubiquity of Web-based applications is causing end users to wonder why they need to lug heavy and expensive laptops around when everything they need is in the cloud. If only those Treos and BlackBerrys were a little bigger and a little more powerful...
I've already mentioned why I don't think Apple is going to come out with a Netbook--it already has one in the iPhone.
But with the combination of Chrome and Android, Google has finally lifted the veil on its strategy to take the desktop productivity fight to Microsoft: by creating a sub-environment within the Internet that makes online applications not only as good, but in many cases, better and more enjoyable to use than conventional desktop software.
Ah yes, that word again: enjoyable. Just as with the iPhone, if enough people want to bring it into the office, IT will find a way to accommodate.