Hugh Pickens writes "There is a long article in the NYTimes, well worth reading, about the future of applications and where they will reside — on the Web or on the desktop. Google President Eric Schmidt thinks that 90 percent of computing will eventually reside in the Web-based 'cloud.' Microsoft faces a business quandary as it tries to link the Web to its existing desktop business — 'software plus Internet services,' in its formulation. 'Microsoft will embrace the Web while striving to maintain the revenue and profits from its desktop software businesses, the corporate gold mine, a smart strategy for now that may not be sustainable,' according to the article. Google faces competition from Microsoft and from other Web-based productivity software being offered by startups, and it is 'unclear at this point whether Google will be able to capitalize on the trends that it's accelerating.' David B. Yoffie, a professor at the Harvard Business School, says the Google model is to try to change all the rules. If Google succeeds, 'a lot of the value that Microsoft provides today is potentially obsolete.' Microsoft used to call this 'cutting off their air supply."
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