Nice article by Morningstar on how technology and market forces are making fundamental changes in the competitive landscape. Companies whose previous market dominance and position were virtually unassailable have now become also-ran businesses experiencing a rapid decline in revenue and, specially, profits.

There is also a good non-techie explanation of Cloud Computing. Here is an excerpt:

Consider “cloud computing” (which is sometimes called “software as a service”). Basically, instead of having all your software and files installed on your computer, in a cloud computing world, you would just fire up a Web browser and use services provided remotely from central locations. In the current way of doing things, I buy Microsoft Word, install it on my machine, use it, and store my files on my local hard drive. But on the bleeding edge of technology, I could just fire up a Web browser, visit the Web site of a word processing service (such as the current Google Docs), and save my documents on the service’s central computers. It’s cheaper, and the documents are automatically backed up and available from anywhere.

Allow me a short analogy using electricity. Think of how the world would look if each of us had our personal electricity generator in our backyards. Although silly and inefficient, this is essentially what we have with computers today. Eventually, it looks as though the computing world will move to the electricity model, where power is generated efficiently at a handful of central locations and then distributed via a robust transmission system.

Another emerging example of this trend comes from console gaming. A new firm named OnLive will soon be offering a service that–according to early reviews–will offer games comparable to what is available today from Microsoft’s Xbox or Sony’s PlayStation. But with OnLive, there is no big box under the television or physical games required, just a controller and a simple device that connects to the Internet.

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Cloud computing is perhaps the most revolutionary trend in this article, as opposed to the other trends that are more evolutionary. Simply put, software is no longer married to hardware. Or, just think of it as the trend toward having the majority of computing power no longer distributed on millions of desktop boxes, but rather provided by central servers in thousands of locations and distributed via the Internet.