The advent of cloud computing has most vendors offering their software service, which is great for consumers. Finally the consumer has some choice without heavy upfront capital expenditure.

There are service companies which offer professional services within the cloud, vendors that offer SaaS and vendors that offer both. The combination vendors that offer a platform, applications, typical IT services, integration, hosted and professional services are poised to capture more of the market a lot quicker than the traditional vendors that just offer software.

With MS offering its services in the cloud with the pending release of Office 2010 later in the year and the possibility to have other MS products such as email, CRM, and Sharepoint within cloud offer a significant advantage to MS. The reason for this is because DaaS (desktop as a service) is not far behind. This will include the addition of the latest and greatest computer operating systems such as Windows 7.0 for all the office computers. MS is poised to have a complete SMB offering in the cloud. Imagine an SMB that can get DaaS for multiple users from all different locations, lower IT costs, minimal administration if any with full MS Office Integration including the CRM and Sharepoint capabilities and even a Dynamics ERP thrown in to offer fully MS run shop for your SMB – pretty compelling argument.

Threats to this models already exist from other vendors like Salesforce, Zoho, Google and others that are offering additional applications around the CRM and rapidly turning it into a new landscape with endless customer choice. With vendors like Oracle’s new Cloud Office offering and its acquisition of Sun the open standards will play a more important part of its integration capabilities to play nice with other apps and vendors, if Oracle should continue down that path.

Other vendors have stepped up their game and even acquired software to offer the same type of vision. Google recently bought Doc Verse which allows users to collaborate, edit share Word, Excel and Powerpoint in real time mode over the web before MS. Since the release of Chrome as browser Google has served notice to the market that a Chrome OS is on the way. This means Google will now offer, an OS, browser, email, analytics, blogging platform, communication features (in the form of Google Messenger) and applications in the form of Google Docs which is now fully compatible with MS OFFICE due to the acquisition of Doc Verse and if you were to plug in a CRM and or Accounting application again – pretty compelling to look at if you are an SMB. All from one vendor a simple point of contact – which is pretty neat from a customer point of view.

It seems that other vendors have caught on to this and are following the leaders. IBM offers a lot of the same type of products and services in the cloud and has solidified its commitment to the cloud by offering Lotus Live iNotes and also IBM Lotus Symphony which happens to be free (a decent MS Office substitute).
Additional vendors are entering this marketplace such as little known players like Evermore Software – a Chinese company in Wuxi province. This vendor offers an Office like suite to rival MS Office for half the price, similar look and feel of Office and is even starting to offer this in the cloud.

As the market demands more of cloud based applications new vendors will challenge the traditional and big players to not only keep up but force them to innovate to stay ahead of the game. Bottom line more consumer choice, easier market entry for SMB’s and may the best vendor win.