Editor’s note: Marc Benioff, chairman and CEO of salesforce.com, really loves Japan. And if you are a startup founder or tech executive, he thinks you should too. He explains why in this guest post, culled from observations from his most recent visit.

Thousands of people lined up last week to buy iPads. And, if you didn’t notice them, it’s because they were in Tokyo.

I’ve been living in Japan for the past three weeks and couldn’t miss the madness around the introduction of the iPad here. I couldn’t believe the demand for this new “magical” computer. After all, this is the country that developed and built some of the world’s most popular PCs—and now the iPad, which was designed somewhere else, is revered. It’s bowed to. (Reportedly, about half of Japanese business and technology magazines are featuring the iPad on their covers.) I expect that out of the 10 million iPads sold this year, at least 500,000 to one million will be sold in Japan.

Something else amazing in Apple-mania happened last week. Apple’s market cap passed Microsoft. I suggested in a post last April, “The end of Microsoft. A door opens to a new cloud”, that this seminal event was about to happen. Steve Jobs described it as being “Surreal”. I agree. It is surreal—both unbelievable and fantastic. This is a milestone that signifies a dramatic change of computing: Windows is on the decline, and new technologies such as iPads and iPhones, Android and Google Search, and Cloud Computing are on the way up.

I have to admit, I love Japan. I love the people, the culture, the language, the architecture, the food—everything. I love walking through the temples and gardens in Kyoto. And, I love the philosophy of “Zen.” I love working in Tokyo, which runs at a frenetic charge that’s even higher than New York City.

The reason I’ve been spending so much time in Japan is because it has become salesforce.com’s second largest market. We’ve found that the Japanese love Cloud Computing because it gives them great software that is eco-friendly, equal for all businesses, and upgrade-free. When I was at Oracle, Japanese customers were always waiting for our special “J” products (the port of our English versions), or the bug fix of a “J” port. It was often a long and painful wait. Cloud Computing solves all of these problems, and Japanese customers receive new software on day one, as well as bug fixes as they happen. Instant gratification.

One of the things that captivated my attention in Japan was how utterly swept the country is with social networking—there is a Japanese Facebook Imperative underway. Japan is already one of Twitter’s largest markets, and local social vendors like Mixi are pervasive. Japanese customers have easily and rapidly adopted social networking as it is highly compatible with their community-based culture. Japan, more than any other country, is ready to accelerate social networking with mobile. The wide penetration of 3G will be an engine for this movement. In fact, Japan has the highest percentage market penetration of 3G of any country, according to InfoCom. The combination of dominant social market share and broadband wireless is a powerful catalyst for Japan’s IT industry.

In my own personal experience here, I’ve seen this willingness to embrace social communications firsthand. Over the past few weeks of demonstrating Salesforce Chatter, salesforce.com’s new enterprise social networking service, I was amazed to find that Japanese customers made unusually quick decisions to pursue it. Customers in other parts of the world (including the U.S.) have required a great deal of testing and evaluation. But in Japan there was an innate understanding of our app to be a Twitter or Mixi for the enterprise, which translated seamlessly—and drove adoption. This experience inspired me to think about what I call “Social Intelligence,” an idea I believe will launch us past business intelligence as the next major theme in enterprise computing.

In Tokyo I enjoyed dinner with one of my friends, John Hinshaw, the global CIO of Boeing. I already knew Boeing is preparing to release the Dreamliner, the most advanced airplane in the world. But, I didn’t know that 35% of the Dreamliner is manufactured in Japan. In fact, the entire all-composite wing—the first of its size and sure to set the standard for how commercial airplanes will be made—is made by Mitsubishi Heavy Industries in Nagoya. Each 98-foot long wing is then airlifted to Washington for assembly in Boeing’s special cargo plane, “the Dreamlifter”. If you aren’t sold on Japan’s abilities for the complex yet, consider that Japan also leads the world in energy and environmental patents and it is also the global leader in energy research and development expenditure and efficiency. I can certainly understand why Boeing is also focused on Japan.

When you get an iPad, the new iPhone 4, or iPod you can’t miss seeing “designed by Apple in California”—the tagline that has generated heat from critics who get upset because the device is assembled in China. But what most people don’t recognize is that the parts are made all over the world, with some of the most important components being produced in Japan, Korea, and Taiwan. Take the iPod Nano. The flash memory is made by Toshiba, the Li-Ion battery is made by Sanyo and Sony, and the color LCD is made by Sharp, Toshiba, and Matsushita—making the total of the Japanese share in terms of cost 81%. The reality is the iPod is made possible by some of the most important technology in the world—and a lot of it is from Japan. Even 10% of the iPad comes from Japan (the rest is made by Taiwanese and Korean manufacturers). Japan is one of the countries doing some of the most exciting research and development in the most complex components, which is what drives the most compelling products.

While in Japan I learned that Japan’s political and technology leaders recognize that embracing new technology and developing fundamental infrastructure are at the core of this country. Anyone who has experienced the bullet train, driven on Japan’s highways, or made a cell phone call in Tokyo, knows Japan fully commits to these two tenets. Cloud Computing is viewed as a critical next step for Japan, and it is the fastest growing part of Japan’s IT industry. Japan is always focused on getting the next big thing right. (And it usually does. I think the energy around the iPad last week demonstrates that they’re ready for Cloud 2—the next transformation in computing being defined by cloud + social + iPad.

One of the greatest surprises during my trip was that then-Prime Minister Hatoyama requested a meeting with me. I spent almost an hour with him demonstrating the power of Cloud Computing in Japan. Then he had a final meeting with the Chinese President. And, then he resigned. Why would he care so much about the Cloud to spend some of his final moments in office with me? I think he realized that he needed to send a clear signal that this new technology is pivotal to the future of Japan.

Right before I left Tokyo for home I met with John Roos, the new United States Ambassador to Japan. John is the former CEO of Wilson Sonsini, and is a Bay Area native. Interestingly, he had never been to Japan before being nominated to his position. He asked me why more entrepreneurs in the U.S. weren’t focused on the amazing markets in Japan. I told him that although the Japanese IT market is the second largest in the world, it’s notoriously difficult for many Americans to navigate. I am grateful to my Japan guru, Larry Ellison, with whom I was fortunate enough to experience many trips to this country while I worked at Oracle for 13 years. If it wasn’t for that direct education, I don’t think salesforce.com would be as successful as it is here.

Japan is accessible through several non-stop flights from San Francisco every day. And while the Japanese market and Japanese customers wait for the arrival of the next great thing, most entrepreneurs, and even VC firms, focus instead on China and India. I have never understood why, as China and India represent a market that is an order of magnitude smaller than Japan when it comes to key technologies, like software. Sure, India and China are fast-growing markets, but the current buyers are in Japan. The way I see it: If you are overlooking Japan you might as well overlook the West Coast of the U.S. The Japanese city of Osaka has a bigger economy than the state of California.

As the second largest IT market outside of the US, the reality is Japan still matters. The world is changing profoundly (just look at my favorite Apple vs. Microsoft market cap chart), but there are some traditional and established entities that retain a significant influence. Entrepreneurs should take note that 85% of all enterprise software is still essentially bought in three core markets: the U.S., Japan, and the U.K. Ignoring Japan means ignoring one of the most important opportunities. And, if you need a hand in this market, come with me on my next trip. I can’t wait to get back.

Editor’s note: What does the iPad have to do with cloud computing? Glad you asked. In this guest post Marc Benioff, chairman and CEO of salesforce.com, explains how liberating the iPad will really be.

The first piece of software I ever wrote was on the TRS-80 Model 1. It was called “How To Juggle”, and it had 4K of memory. It was my version of “Hello World”, what every programmer first writes on a new piece of hardware. CLOAD Magazine purchased it for $75, they distributed it to their subscribers on a cassette (there weren’t disks for the TRS-80 yet). It was 1979. I was 15 years old, and I was a software entrepreneur. I still am.

Just five years later, I was an intern at Apple writing some of the first native assembly language on the Mac and working in a building called Bandley 4 with a pirate flag on the roof. Guy Kawasaki hired me to help developers write software on the Mac without using its predecessor, the Lisa (something that had been required when the Mac launched). My first example of how to write for the MDS 68000 development system manifested itself in a video game called “Raid on Armonk.” It was an allusion to IBM’s headquarters. They were the anti-Mac and we clicked and destroyed them. (Turns out they eventually clicked on themselves.)

I’m sentimental this week, and thinking about the past, because I have seen the future. The future is not a Mac, or even a PC. Its father created a lot of the computers I’ve loved: Apple IIe, Mac, and iPhone. There have been others I have loved, even some PCs and yes, my Blackberry, but none of that matters anymore. Looking ahead, I am energized, a door is opening, and we are all going to walk through it. We’ll soon enter a new world of computing accelerated once again by the industry’s creator Steve Jobs, and amplified by someone conceived after the PC, Mark Zuckerberg.

The future of our industry now looks totally different than the past. It looks like a sheet of paper, and it’s called the iPad. It’s not about typing or clicking; it’s about touching. It’s not about text, or even animation, it’s about video. It’s not about a local disk, or even a desktop, it’s about the cloud. It’s not about pulling information; it’s about push. It’s not about repurposing old software, it’s about writing everything from scratch (because you want to take advantage of the awesome potential of the new computers and the new cloud—and because you have to reach this pinnacle). Finally, the industry is fun again.

Last week I gave presentations to more than 60 CIOs in various meetings throughout America’s heartland. My message to them: We are moving from Cloud 1 to Cloud 2, and the iPad is the accelerator. Many of them haven’t even made it to Cloud 1—some are still on mainframes. They are working on MVS/CICS, or Lotus Notes, and they have never heard of Cocoa, or even that there is now HTML 5. This is unacceptable. The next generation is here. The iPad that shows us what now is really possible—and that we all need to go faster. Unfortunately, some CIOs would rather retire than go faster.

Cloud 1 ————————————->Cloud 2

Type/Click———————————->Touch
Yahoo/Amazon—————————–>Facebook
Tabs——————————————>Feeds
Chat——————————————>Video
Pull——————————————->Push
Create—————————————->Consume
Location Unknown————————->Location Known
Desktop/notebook————————->Smart phone/Tablet
Windows/Mac——————————>Cocoa/HTML 5

What’s most exciting is that this fundamental transformation—cloud + social + iPad—will inspire a new generation of wildly innovative new apps that will change entire industries. Take health. We have all been waiting for the health application that will revolutionize how we share and communicate with our doctors, and help us make better health care decisions. The apps we have seen as first generation EHR/PHR just have not cut it, and now with ObamaCare there is no killer app to accelerate through the new EHR reimbursement program. The shift ignited by the iPad will allow the proliferation of these new missing apps, and automate the industries and professionals left behind by the last generation of technology. Now, no industry will be left behind.

It was on TechCrunch in late February that I first suggested that the enterprise software industry has to move forward and posted an article, “The Facebook Imperative.” In 1999, I was obsessed with the question, “Why isn’t all enterprise software like Amazon.com? And in 2010, the question evolved: “Why isn’t all enterprise software like Facebook?” This week we will have the answer to that question in our hands with the iPad. It’s a more productive, easier, and fun way to work and live. The iPad shows us the old world is no longer good enough. We’ll need new software with a new UI.

Our industry has gone through many shifts, but ultimately, the big ones have always been about software, not hardware. Now, we are seeing a simultaneous software and hardware revolution. The key apps we use in productivity, collaboration, communication, entertainment, education, and even health, will all be rewritten to take advantage of the new capabilities. This will result in a new generation that looks more like Facebook on the iPad than Yahoo on the PC. Our industry is changing. We all need to step up to meet this change head-on or we will leave an incredible opportunity behind.

Two weeks ago on TechCrunch I posted “The Facebook Imperative,” which posed a simple question, “Why isn’t all enterprise software like Facebook?” It was the next iteration of the question I asked in 1999 that spawned salesforce.com, “Why isn’t all enterprise software like Amazon.com.” If you have read my book, Behind The Cloud, you are well aware how that one question launched a company, and a movement. Its been an exciting decade. But the real excitement is just starting.

Frankly, I’ve been amazed by the huge amount of responses, tweets, and comments (aka “the ruckus across the blogoshere,” as Joe McKendrick calls it). It only strengthens my conviction that we are about to see the greatest revolution in enterprise software, ever. Well, really, the most exciting revolution in computing, ever. It will create more value for users, customers, and vendors by an order of magnitude over what we saw in the last wave. And, it’s really starting to happen right now. It is realtime. It is social. It is mobile. And, it is about time. Literally, it is about productivity.

I’m energized by the excitement I see for a new generation of collaboration software in the enterprise to replace antiquated Microsoft Sharepoint servers and IBM’s Lotus Notes. I’ve enjoyed seeing my observation—that Lotus Notes was conceived before Mark Zuckerberg—reverberate around the web. But, the reality is the Facebook Imperative contained more than a funny line. It hit a nerve. We are all responding—debating—a question that is an imperative because we all need to take software to a new level, and now is the time. Microsoft and IBM have maintained the status quo on enterprise collaboration software too long, and it’s time for a change.

There are an overwhelming number of you who agree that its time to transform the business conversation the same way Facebook has changed the consumer conversation. We are betting salesforce.com’s future on it. Approximately 40% of companies are already deploying or planning to deploy a social computing platform, a number that’s expected to rise, says Irwin Lazar of Nemeretes Research. Not everyone agrees, mostly the vendors that are milking their cash cows. But, make no mistake about it, this generation of social platforms is very different than the last.

Charles Zedlewski emerged from a long blogging hiatus to argue that Facebook is designed for entertainment—not productivity. Well, that’s not surprising given that he works for SAP, one of the companies I have previously referred to as “innovationless”—in my view they remain the Anti-Cloud. Their actions speak for themselves. Still, I’m astounded that more enterprises haven’t figured out how to tap into the real collaborative power of Facebook and Twitter, and the new social models that they have pioneered.

I consider Facebook and Twitter—and the ability to tap into my network of friends and followers—one the most productive ways I can start my day. Using these new Internet phenoms, I’ve tested new ad campaigns and elicited great customer responses, promoted my book to a large audience of people who cared, and with the help of my network, even named new products—all before I sat down for breakfast. I’m not alone; ask Vinnie Mirchandani for a sneak preview of his new book and read how Starbucks, Avon, and Pepsi are using these new social services to increase productivity in their enterprises. Or, look at how Causes, one of Facebook’s most popular apps, is having a fascinating impact on the future of philanthropy.

While my admiration for Facebook is no secret, the fact is that the Facebook Imperative—much like The Amazon Imperative of 1999—is just a metaphor. Like all metaphors, they are terrific catalysts to introduce an idea and orient people. They are rooted in inspiration, but they do not funnel down to the granular details. And, there are details that make this movement entirely new in practice. The power of this new model is to create the next level of productivity, collaboration, and learning in the enterprise. And, I see it happening now in our own company.

For years we’ve been reading about the potential for institutional memory to transform a corporation into a learning organization. But, have we seen it happen beyond very few unique organizations? A true paradigm shift occurs when the barriers of entry are removed for everyone. That is changing fast. With these new social models, there is a way to immediately leverage the knowledge of an organization. People with expertise and relevance are instantly looped in, can participate in the conversation, collaborate, and make contributions more simply than ever before. That will be the catalyst of this new productivity revolution—delivered through these new social enterprise platforms.

We have deployed Salesforce Chatter internally through our own beta program, and we are now using the social models proven by Facebook and Twitter to run our company. Our new social enterprise is built atop our existing business information and applications. It’s not partitioned off from other enterprise applications, but is an integrated part of it—offering a new view of the data that is more productive and easier to use. Through enterprise sharing models, filtering and discovery tools, users have full flexibility over which people and data they follow—allowing them to fully maximize the value of their own feeds and eliminating the risk of “pollutants” some critics fear.

I have learned more about my own company in the last three weeks using Salesforce Chatter than I have in the last three years. It reminds me of the time we went live with http://ideas.salesforce.com. The awareness I have today of what is happening with our employees, our customers, our products, our customer service escalations, and even the deals we are closing is spectacular. Social computing for the enterprise is about seeing what matters to your company, what is happening with your products, and among your people. It’s about the information you need to make decisions finding you. I’m amazed at the potential of this technology. There is just no way I can explain it to you in writing, so here is an actual screen shot that I took off my desktop to give you an idea of the flow (click to enlarge):

It is time to let go of the past and start to create a compelling future for the software industry. I’m energized by the skeptics. It’s familiar. They all eventually convert to what’s important to customers, or become increasingly irrelevant. You don’t have to look any farther than last week when Steve Ballmer spoke to the University of Washington telling them Microsoft was finally “All-In” the cloud. Well, that only took a decade or two. No more software plus services, now they are 100% cloud too. Sure.

I’m living in the post-PC revolution. I’m in a desktopless world that is about feeds and profiles running in all my browsers and mobile devices, and interacting in exciting new ways. It doesn’t matter if I am in the office, at home, or at Starbucks—I am productive wherever I am. The enterprise is not just going to the cloud, it’s now going social, and it’s going mobile. Facebook and Twitter have shown us the way. Like Microsoft, and IBM, not everyone has to get it yet, but eventually they all will. As they say: Shift happens.

I quit my job at Oracle in 1999 because I couldn’t stop thinking about a simple question: “Why isn’t all enterprise software like Amazon.com?” Why couldn’t applications be run from a simple website, without software or hardware to install, and pricy consultants to hire? Why couldn’t we just compute in the Internet, or the cloud, and get away from the data center and all its complexity. Simply put, I wanted to simplify the enterprise. It was a pretty straight-forward idea, but from the confines in which I sat, there wasn’t anything close to a straight-forward solution.

That vision led to the founding of salesforce.com. But the enterprise world wasn’t ready for Amazon.com, or eBay, or Yahoo, or any of the innovative services that were changing the way consumers bought, sold, or communicated. I tell this story in my book Behind the Cloud and can’t help but note that the factors at play 10 years ago—an inspiring service, wide skepticism, and phenomenal potential—mirror where we are today. But it’s no longer Amazon that frames the questions or gives us the answers.

In this decade, I’ve become obsessed with a new simple question: “Why isn’t all enterprise software like Facebook?” As we were focused on bringing enterprise computing into the modern age, Facebook redefined the values of consumer computing and helped ignite the social phenomenon. The compelling aspect of feeds, profiles, and groups, amplify the service’s stickiness. So does its functionality on a mobile device like an iphone—necessary to secure a service’s status as a “killer app.” Facebook is where I start my day to find out what my friends and family are doing. It’s where I go to see the important events in my social life. Everything I care about and need to know is pushed to me—and it requires no work on my part.

What does the social revolution mean for business, though? So far it hasn’t meant much. Currently, our methods of collaboration are defined by Lotus Notes or Microsoft SharePoint, but these tools haven’t kept up with the changing times. They were conceived before anyone knew what a “newsfeed” was. (In fact, Notes was conceived before Mark Zuckerberg was!) Today, realtime information is possible, which has changed everything: How people consume information has changed, how people learn things about each other has changed, and how people stay current has changed. Most of all, our expectations around immediacy have changed.

Now, we need to take this idea to our businesses. We need to transform the business conversation the same way Facebook has changed the consumer conversation. Market shifts happen in real time, deals are won and lost in real time, and data changes in real time. Yet the software we use to run our enterprises is in anything but real time. We need tools that work smarter, make better use of new technology (like the mobile devices in everyone’s hands), and fully leverage the opportunities of the Internet.

New realtime cloud applications, platforms, and infrastructure offer the path to redefine the future of collaboration. Now in beta, Salesforce Chatter takes the best of Facebook, Twitter, and other social leaders, for instance, and applies it to enterprise collaboration—making people more productive and businesses more competitive. I already see it working: I have an enterprise desktop where without any effort I can learn about what my team is focusing on, how my projects are progressing, and what deals are closing. It is fundamentally changing the way our organization collaborates on product development, customer acquisition, and content creation—making it all easier than ever before.

We are on the precipice of a major shift in our industry. It stems from a change we badly needed and the once-in-a-decade question we had to ask. And this time, we are all ready for the answers. Luckily, this time, I don’t have to leave my job to find out what they are.

For almost ten years now, we have been witnessing a decisive shift from client-server software to software as a service. Google, eBay, and Amazon.com established the value of multi-tenant internet applications in the consumer market, and salesforce.com, Google, and others have been proving that this same multi-tenant model is winning in the enterprise as well.

This shift to Web-based applications has generated two powerful waves so far. Now, we are seeing a third wave—one that we are calling Web 3.0—and it may prove to be the most significant and disruptive yet to the traditional software industry.

While the world doesn’t need another buzzword, I feel that both the emerging generation of entrepreneurs and developers, as well as traditional software ISVs, need to grasp the enormity of Web 3.0 and its potential to create change, disruption, and opportunity. Web 3.0 is about replacing existing software platforms with a new generation of platforms as a service.

To put Web 3.0 into perspective, we need to look at all of the major waves in the history of the Web. They are not defined by distinct periods of time, but are best seen as overlapping waves of adoption.

Continue reading on TechcrunchIT…

For almost ten years now, we have been witnessing a decisive shift from client-server software to software as a service. Google, eBay, and Amazon.com established the value of multi-tenant internet applications in the consumer market, and salesforce.com, Google, and others have been proving that this same multi-tenant model is winning in the enterprise as well.

This shift to Web-based applications has generated two powerful waves so far. Now, we are seeing a third wave—one that we are calling Web 3.0—and it may prove to be the most significant and disruptive yet to the traditional software industry.

While the world doesn’t need another buzzword, I feel that both the emerging generation of entrepreneurs and developers, as well as traditional software ISVs, need to grasp the enormity of Web 3.0 and its potential to create change, disruption, and opportunity. Web 3.0 is about replacing existing software platforms with a new generation of platforms as a service.

To put Web 3.0 into perspective, we need to look at all of the major waves in the history of the Web. They are not defined by distinct periods of time, but are best seen as overlapping waves of adoption.

Web 1.0: Anyone Can Transact
Web 1.0 was about the emergence of the “killer app” from companies like eBay, Amazon.com, and Google. Although we thought of them as Web sites at the time, they were really amazing applications with a level of functionality, ease of use, and scale that had rarely been seen before by the average consumer. Transactions, not just of goods but of knowledge, became ubiquitous and instant. The efficiency and transparency that was once the domain of global financial markets was now at the command of individual consumers and businesses. Web 1.0 remains a huge driving force today and will continue to be for some time.

Web 2.0: Anyone Can Participate
Web 2.0 is about the next generation of applications on the Internet, featuring user-generated content, collaboration, and community. Anyone can participate in content creation. Posting a viral video on YouTube, tagging photos from a party on Flickr, or writing about politics on Blogspot requires no technical skill, just an Internet connection. Participation changes our idea of content itself: content isn’t fixed at the point of publication—it comes alive. Google’s AdSense became an instant business model in particular for bloggers, and video-sharing sites have rewritten the rules of popular culture and viral content.

Whether you are creating a business around Web 1.0 or 2.0, building massively scalable data centers that are secure, reliable, and highly available is not a job for the faint of heart or shallow of pocket. For companies entering the emerging software as a service industry, the massive time and capital requirements remain a substantial barrier to entry. Moreover, traditional client-server software development is still mired in painful complexity. And the “rewards” for creating a successful application are arduous deployments and maintenance.

Web 3.0: Anyone Can Innovate
Web 3.0 changes all of this by completely disrupting the technology and economics of the traditional software industry. The new rallying cry of Web 3.0 is that anyone can innovate, anywhere. Code is written, collaborated on, debugged, tested, deployed, and run in the cloud. When innovation is untethered from the time and capital constraints of infrastructure, it can truly flourish.

For businesses, Web 3.0 means that SaaS apps can be developed, deployed, and evolved far more quickly and cost-effectively than traditional software of the client-server era. The dramatic reset in economics should help CIOs finally break through the innovation backlog created by the cost and complexity of maintaining client-server apps.

For developers, Web 3.0 means that all they need to create their dream app is an idea, a browser, some Red Bull, and a few Hot Pockets. Because every developer around the world can access the same powerful cloud infrastructures, Web 3.0 is a force for global economic empowerment.

For ISVs, Web 3.0 means that they can spend more time focusing on the core value they want to offer to customers, not the infrastructure to support it. Because code lives in the cloud, global talent pools can contribute to it. Because it runs in the cloud, a truly global market can subscribe to it as a service.

Just ask my friend Jeremy Roche, the CEO of CODA, Europe’s second-largest ERP vendor. CODA successfully navigated the transition from mainframe to client-server, and now it’s facing an even bigger transition to SaaS. Building the infrastructure—not just the data center but the entire software stack as well—would take upwards and $20 million and several years. Instead, Jeremy is using our Force.com platform to get a massive jump-start on this process. His systems engineers will not have to cobble together servers, load balancers, and networking switches and then find a small army of people to tune and maintain them. His software developers won’t have to build a security and sharing model, database or workflow engine—they’ll just use ours. Meanwhile, Jeremy’s team can focus on exactly what they do best: building a killer accounting application. CODA2go will be available this fall, giving Jeremy a big lead on the competition.

Amazon.com, Google, and salesforce.com have spent hundreds of millions of dollars to build these infrastructures already, and a dozen others, including Facebook, MySpace, Ning, Rollbase, Longjump, Dabble db, Intuit, and Coghead, are also offering some form of platform as a service in the cloud.

Creating Value
How much disruption will Web 3.0 cause? An examination of the technology forces at work gives us a good clue:

Vic Gundotra, VP of Engineering at Google, offered this interesting perspective at a recent salesforce.com event. Vic looks at the history of computing, starting with the mainframe era, as two grids: vast computing power vs. low accessibility and terrific ease of deployment vs. poor depth of functionality.

The client-server era caused a reversal of polarity in both cases. Computing power was much more accessible but limited in scope; there was an explosion in functionality, but deployment became a nightmare. Vic sees the Web 3.0 era eliminating these trade-offs and potentially maximizing computing power, access, ease of deployment, and depth of functionality. As Vic says, the key is that industry leaders like Google, salesforce.com, and others have to work to make the cloud ever more accessible and programmable, keep connectivity pervasive, and make the client more powerful.

In our view, the move from mainframes to client server was painful for IBM and DEC and created massive wealth for a broad generation of new companies like Microsoft, Oracle, PeopleSoft, and SAP. Web 3.0 threatens Microsoft’s .net, BEA, and WebSphere. And while I expect companies such as Amazon.com, Facebook, Google, and salesforce.com to do well, I think that even more wealth and further innovation will be created by a new, more broadly distributed class of companies and entrepreneurs that leverage the power of Web 3.0.

One of our developers has a bumper sticker on his laptop that captures the spirit of Web 3.0 perfectly. It reads: “My other computer is a data center.” That’s a claim that any developer in the world can now make. And that’s the stuff of revolution.