Shifting revenue models for vendors

The industry analysts say that we are on revolution back to thin client PC and applications. This revolution is due to the advent and quick uptake of all type of cloud applications. As applications and once non-traditional software makes its way to the cloud industries and applications that were once very closed are emerging as cloud solutions. These newly available software options are allowing a lower entry point for smaller businesses to compete and utilize world class tools. This perceived loss revenue by declining hardware sales is true only to a degree. While this will be true to an extent the forgotten part of this equation remains on the flipside of cloud computing. The vendors and companies offering cloud services and software applications must set up infrastructure and house the necessary hardware. Internet service providers, software developers, vendors, internet hardware vendors (vendors that make the internet work; servers, green energy saving companies, storage vendors, and security related companies for encryption, financing companies and like) are all investments that will have to be made for an entity to setup a cloud offering. As cloud computing becomes more popular security options become of primary importance. New companies with security software consulting of how to build private clouds, how they interlink with public clouds and the security options available and how these are considered as part of the enterprise IT strategy are emerging. Applications such as MS OFFICE have web competition. OFFICE will soon be available in the cloud while Google Docs and others are already there. Will this shift of delivery options lower the licensing of such applications ? It should as vendors are competing for market share as Google Docs for a year subscription is cheap. Cloud integration to traditional in-house applications will have to be considered as there will be be a large number of companies that still have fully functional software but need to enhance or add functionality using cloud technologies. This will in turn cause vendors to rethink its licensing structures and how to recoup this lost initial revenue. How will vendors adapt to this changing model and shift in business preference ? We will have to wait and see what unfolds.. these are exciting times.