Cloud computing is perhaps the biggest information technology catch phrase of the year. With Google making its AppEngine publicly available a couple of months ago, and Microsoft's Windows Azure expected later this year, the big boys of computing have officially entered the fray. Both expect to compete with Amazon's Web Services, which became publicly available late last year.

While there are differing opinions as to what cloud computing really is, we define it to be the provision of sophisticated software applications over the Internet. Such software runs on hardware that is owned, operated, and maintained by a service provider.

Such applications require only an Internet connection and a Web browser on the user's end. Relatively little processing power is required, since all the heavy lifting is done by the provider.

Using our definition, Elastic Compute Cloud (EC2) is the most relevant of the dozen or so services offered under Amazon Web Services. Under EC2, customers rent hardware on which to run their own software applications. EC2 supports a wide variety of both open-source and commercial operating systems, databases and application-development environments.

Google's App Engine supports only two programming environments: Java and Python. It limits you to its own database engine. Theoretically, this simplicity improves programmer efficiency, but, of course, restricts flexibility. App Engine is free up to a certain quota, generally equating to about 5 million page views per month.

Windows Azure supports many of the common Microsoft tools and environments, including SQL Server, Microsoft.Net, SharePoint, and Visual Studio. Microsoft to date has been rather tight-lipped about pricing, saying only that it will be competitive and usage based.

All of these relatively new offerings operate under the premise that the end-user organization will deploy and/or develop its own software applications—or hire someone to do so. This is somewhat different from the established cloud computing landscape which is more of a”; soup to nuts”; approach, often including software maintenance and support.

Will these behemoths monopolize the marketplace? Probably not. There always will be a place for smaller, industry-specific vendors who can leverage business experience and knowledge. Further, the soup-to-nuts vendors will continue to be in demand.

John Agsalud is Pacific region director of professional services for Decision Research Corp. He can be reached at 949-8316, ext. 171., or at .(JavaScript must be enabled to view this email address).