Information Week has a special report.

In the next few years, software, the way it's developed and supported, and the vendors that deliver it are in for more changes, driven by emerging business needs, new customer demands, and market forces. "There's an argument that almost every company is in the software business in one way or another," says Charles Fitzgerald, Microsoft's platform strategy general manager. People may not think of eBay or American Express as being in the software business, he says, but they are. "If you participate in the information economy, you will be a software company. If you're in a customer-facing business, software is the way you're going to differentiate yourself."

But will the industry that provides much of that software look the same three, five, or even 10 years down the road? Probably not. It's an industry that goes through periodic waves of consolidation and expansion, and the consensus is that it will be in consolidation mode for the next few years. Oracle CEO Larry Ellison has famously predicted that, within a few years, the software market will be dominated by a few companies, including Microsoft, SAP, and--of course--Oracle.

Some software buyers agree. "The number of software vendors will definitely get smaller and smaller," says Mani Shabrang, head of technology deployment and research and development in Dow Chemical Co.'s business-intelligence center. But as vendors of mature software categories such as enterprise resource planning consolidate, he says, vendors of new types of software will spring up. Shabrang foresees a new generation of tools for visualizing data and intelligent software that doesn't just mine text but recognizes the tone and meaning of written prose.

There's no consensus on what the next killer application will be, but emerging service-oriented architecture technology is likely to provide the foundation for a new generation of software applications. In contrast to today's model of vendors developing ever-larger applications that can take months to install, the software of the future will be made up of components, many of them developed in-house by the businesses that need them.

One direction software may take is to move from integrating business processes within a company to integrating these processes between companies, Sabbah says. For instance, such applications might link ordering, invoicing, and inventory-management tasks up and down a supply chain within an industry.

Joel Spolsky points to a Rob Whelan post about Google Suggest.

Joel: "It's one of the first prominent uses I've seen of the XmlHttpRequest technique of going back to the web server for more data while the user interacts with a page."

Rob writes:

The source for the page is quite simple; most of the work happens in a condensed JavaScript library [google.com]. Not easy reading (note the word "condensed" above, meaning function and variable names are 1 or 2 chars, and all extra whitespace was removed...), but it's actually pretty straightforward.

It disables your browser's autocomplete on that textfield (for obvious reasons). Then it basically just defines a hidden div for that auto-complete dropdown (variations on this depending on browser... frickin' incompatibilities).

Each time you type a character, it populates that div body with the results of a quick, tiny query back to Google. It's NOT running the search for you; it's hitting (I assume) a simple, probably totally in-memory list of the most popular searches and number of results. That's how it can be so quick a response -- the lookup on their end is super-minimal, and the data to be transferred is probably less than 1k each time.

Cool. Nice concept, nice execution. And one of those nice "only obvious in hindsight" additions.

Forbes writes about Cassatt's launch:

"We're heading for self-configuration" of computer systems, says Coleman, founder of BEA Systems (nasdaq: BEAS - news - people ), who left that company last year to start Cassatt, a software company aiming to steer that self-configuration. "With the commoditization of the computing world, we have to automate information technology operations." Cassatt is backed by Warburg Pincus with a reported $50 million investment.

Cassatt will announce its first product, software for automated management of large systems of computer servers and applications. Coleman says the software will be able dynamically allocate previously dedicated servers to different tasks as needed through so-called "virtualization" of servers, fixing problems on the fly and only telling their human managers about it afterward.

The software costs about $25,000 for the controlling software, and $1,500 per server managed. Thus, a system of 30 servers would cost $70,000 -- $25,000 for the brain and $45,000 for the individual managers.

Coleman says Cassatt marks the start of a fourth ten-year cycle in computer technology. The previous ones include exploration of the capabilities of the semiconductor, resulting in the personal computer; their growth into client-server networks; and the maturation of that into the Internet and Web services architectures.

In each case, both the capabilities and the geography of electronic intelligence grew vastly larger. In the new era, says Coleman, "the footprint is the globe, always connected -- the productivity enhancements will surpass everything we've seen before."

Users are moving to commodity systems and the software market is moving from monolithic applications to Web services and service-oriented architectures, said Steve Levine, Cassatt's marketing VP, and former vice president of marketing at Oracle. "That creates an opportunity to provide an operations environment that makes it easier and more effective and reduces the cost and complexity of managing commodity servers," Levine said.

Collage can be thought of as virtual environment software, said IDC analyst Dan Kusnetzky. "It allows you to build applications that run on a collection of machines on high-volume, low-cost, industry-standard systems," Kusnetzky said. The software provides for workload failover and enables functions such as I/O to be done separately from the application processing, he said.

strategy+business selects the best business books of 2004:

Strategy: "Confronting Reality: Doing What Matters to Get Things Right," by Larry Bossidy and Ram Charan

Management: "The Real Thing: Truth and Power at the Coca-Cola Company," by Constance L. Hays

IT & Innovation: "The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability," by Marco Iansiti and Roy Levien

Leadership: "Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value," by Bill George

Governance: "Back to the Drawing Board: Designing Corporate Boards for a Complex World," by Colin B. Carter and Jay W. Lorsch

Change Management: "Change Without Pain: How Managers Can Overcome Initiative Overload, Organizational Chaos, and Employee Burnout," by Eric Abrahamson

The Bubble: "Rational Exuberance: Silencing the Enemies of Growth and Why the Future Is Better Than You Think," by Michael J. Mandel

Behavioral Economics: "The Company of Strangers: A Natural History of Economic Life," by Paul Seabright

The New Consumer: "The Substance of Style: How the Rise of Aesthetic Value Is Remaking Commerce, Culture, and Consciousness," by Virginia Postrel

Ramesh Jain writes about our meeting and interest in next-gen search: "We both are interested in this topic and feel that this area is ready for some interesting technical approaches and new businesses. It will be great if a comapny for next generation search technology came from India. Not impossible, but also not an easy thing to happen considering the history of IT industry in India. India has done very well and is doing even better in service industry, but has failed to produce any product so far. It will happen, but the question is how soon?" In this context, it is interesting to read Ramesh's white paper on search.

It would be good to build a world-class product company out of India. We have the talent and the capital - both need to come together now.

Ramesh's thoughts on India: "All the signs clearly indicate that India is on a major upswing in its economy and its confidence about future. Very good to see that. Being an Indian, I feel very good about it. But India has a long way to go before as a country it can compete in overall living standard with most developed countries. There are signs of uneven economic development everywhere. It is important to pull the lower level masses also into this economic boom along with a only a minority in urban areas. And this remains a major challenge."

Tomorrow’s world will have network commPuters, broadband wireless networks, centralised grids and a wide variety of on-demand services. The question to answer is: what are the money flows in this ecosystem?

Traditionally, the worlds of computing and telecom have been very different in their approach to payments. The computer industry, for the most part, has the users assemble the various components and pay for them independently and upfront. The telecom industry has tended to subsidise the device and then charge the user a monthly subscription with a lock-in for a specified period. Which model is likely to prevail?

I believe that the payments model in tomorrow’s world will closely mirror that of today’s telecom industry. With a zero-management access device, the “commPuting” industry will move to a subscription model for the whole solution – device, network access, infrastructure usage, and the services. This is because the next set of users will not be able to afford large upfront payments or be savvy enough for putting together the whole solution.

This will create the need for “commPuting utilities” – entities which aggregate and brand the full solution and user experience, and deliver to users across different market segments. There will be horizontal utilities which will work with last-mile partners or virtual utilities to take the solution to the end customers across homes, enterprises, educational institutions, cybercafes and rural areas. There will also be specialised utilities which focus on niches based on offering or market – for example, online gaming or education. The commPuting utilities will need to provide for user provisioning and billing, along with revenue sharing. It is very much what the mobile operators do for the various value-added services that they offer on their network.

An interesting element in emerging markets is that of pre-paid services. Because the credit system is not as well developed and many of the users may not have bank accounts or credit cards, there will be need to offer the services on a pre-paid basis. This is what has helped the mobile industry – in India, nearly three-quarters of the users are on pre-paid connections. A similar approach will need to be taken for commPuting.

What is a good price point for the minimum basic service? Two price points that are known in India are that of Rs 250 ($5.50) per month for cable TV services, and about twice that in urban India for cellphones. I believe that a price point of about Rs 700 ($15) per month would be very attractive for the complete commPuting solution. For the singleton user segment, the break-up of this would be as follows: Rs 200 for the device, Rs 100 for the grid infrastructure and a set of basic services, Rs 350 for the broadband connection, and Rs 50 for the channel who does the installation and support.

This, then, is the vision for tomorrow’s world: a whole, end-to-end solution at a price point of a rupee an hour (translating to Rs 700 per month). In a country like India, there is an opportunity to provide at least 100 million such “commPuting” connections across 40 million employees in enterprises, 45 million homes in urban and semi-urban India, 1 million schools needing 10 commPuters each and 50,000 colleges requiring 200 commPuters each. This is what will build the digital infrastructure of India. This is as big, if not bigger, than what we have seen happen in telecom over the past 5-7 years. With a platform as rich as this, we can then let the mind roam free on what tomorrow will be like.

Tomorrow: Five-in-one