By 2012, desktop software will be a quaint throwback—replaced by cloud computing. - Inspired by the increasingly crowded cloud computing market

Cloud computing, or the shift from desktop and server software to Web-based services, is becoming increasingly important. Sun, IBM, Amazon and Google are all players – and Microsoft has big plans to jump on, and perhaps lead, the bandwagon.

"Microsoft now has 20 multinationals using its cloud offerings, including Coca-Cola and Nokia; another 3,500 companies are testing a version using shared servers that should become generally available this fall. Exchange email, Sharepoint collaboration, Communications Server instant-messaging, and the Dynamics customer-relationship-management software are among the products Microsoft has moved to the cloud," writes Michael Fitzgerald.

Senior vice president at Microsoft, Chris Capossela, "predicts that in five years, half of all Exchange mailboxes will be in the cloud, and 100% of Office users will be using at least some cloud features."

While critics point to Google's early foray into the cloud computing market, Dana Gardner, a principal analyst at Interarbor Solutions believes that Microsoft's timing is good: "the number of companies using Google Docs. More bad news for Google: cloud computing may in fact produce lower margins than its core business. To read more about this, click here.