I'm a weirdo, I live in The Cloud

A statistically unsound study shows that comparatively few PC  people have heard of, let alone use online applications As sure as night follows day and the blogs go bonkers. Attention is naturally directed towards a Google v Microsoft shoot out.

If you're one of the 500 million Microsoft users who switch on a Dell/HP/whatever every morning to get your work done then why would you have heard of online applications? Chances are you 'live' in Office and an enterprise system of some sort. Last I heard, NetSuite is looking to pull c$100 million in revenues. That's not even a line item on Oracle/SAPs accounts. It's petty cash to Microsoft.

Dan Farber suggests that:

This survey simply indicates that a tipping point toward the cloud hasn’t been reached yet. So-called Web phenomenon like Google search, Facebook or MySpace didn’t mystically reach warp speed in adoption. Moving robust applications to the cloud is a bit more complex than instant messaging or a social graph. At some point software-as-a-service applications, with offline support, will take the bulk of the pie, but it will require a few more turns of the crank.

It's a bit deeper than that. The consumer focused, web-based development bubble we're seeing is creating a reality distortion field of its own. Last week in Paris, some 2,000 tech innovators gathered for LeWeb3. The speaker list reads like the great and the good from the innovation side of the tech house. A good 80% were carrying MacBook Pros. There wasn't a PowerPoint to be seen. JP Rangaswami delivered his presentation on a RippleRap wiki! As Robert Scoble remarked to me: "We're the ones on the edge, the world outside is different."

My Irregular colleague Vinnie Mirchandani recently observed in one of our Google Group discussions that the pace of innovation among consumer facing applications is making the enterprise look positively glacial and that enterprise attention will move to the online world - in time. I'm not even sure this is the whole story. I think there are four factors in play:

1. Enterprise attention on Web 2.0 (hate the expression but...) applications like blogs and wikis, the majority of which are offered as online solutions, is intensifying. The last few weeks I have seen a significant uptick in interest, especially in the context of developing new knowledge management solutions for governance, risk and compliance scenarios. Checking with colleagues, the same story is repeated across geographies and industries. A significant portion of those projects will need to embrace document management and that means working with Word - or some such. Earlier today, I fielded two such requests. This is almost unheard of, especially in the run up to the holiday season.
2. Microsoft has a sleeping beast in its Windows Live Spaces product line. I recently met Kris Hoet, Microsoft's head of EMEA marketing for Online Services, which includes this product line. I outlined the potential value to Microsoft from using Live Spaces in the context of Dynamics, which in turn implies Excel. He didn't know about this potential connection but then as a manager in a  siloed organization, why would he? Yet if Microsoft could see the opportunity and pull the trigger, then it validates the rest of the market.
3. Whether it takes six months, a year or more, this whole story is a distraction from the wider point about market size and scale. There is room for many players. The new players don't need to win market control to enjoy a handsome living and serve customers well. Whether that happens is moot. But I think on this occasion, history is not a good teacher. That's not to say I'm betting against Microsoft. But I'm not betting with them either.
4. Enterprises behave like irrational creatures of habit. They don't always buy what's good for them but they keep on doing it anyway. How their users behave is another matter. If the current Gen Y/M is truly enamored of online applications and the freedoms that Facebook, Google Apps and the like offer, they will bring the change that tips online towards mass adoption. The precedent is Excel. Despite it being an awful tool outside light weight ad hoc analysis, it is the de facto financial analysis tool used inside the enterprise.  When users need to collaborate and can find the same or similar functionality from Zoho, Edit Grid and Google, how long will it be before they switch?

In the meantime, I'm one of those weirdos who lives in The Cloud. None of my clients do but it doesn't matter. We get stuff done. Some even enjoy collaborative document editing in Google Docs. Who would have ever thought that possible?