Cloud programming will rule app dev's future

To say that the entire future of software development will be dedicated to applications that run in the cloud would be extreme. But just barely.

First, let's state the obvious. People will continue to write code for mainframes, client-server systems and even stand-alone PCs. Not to mention iPhones, Blackberries, embedded systems, Wiis and more. Each and every one of these digital devices will find a purpose and therefore a market for software specifically tailored to it.

And much of this software will be sold with an old-fashioned, perpetual-license model. No subscriptions. No bits flowing back and forth over broadband pipes. How quaint.

But if I were a developer seeking a market with major momentum behind it, the first place I'd look would be the cloud. It's the best place to be working now because it's growing and is likely to do so for the foreseeable future.

That's what Garrett Davis an independent contractor in San Francisco told me. He cranked out code on big iron for more than three decades, but now he's shifted his attention to Google App Engine. And after more than 20 years building security and management software for DOS and Windows machines, Danny Kim, the chief technology officer at FullArmor Corp. in Boston, has begun moving his company's focus to Windows Azure, Microsoft's cloud computing initiative.

He says, "Azure is like when Microsoft took DOS to Windows. It changes the game."

Davis, Kim and many others I've spoken to see that money is to made in the cloud. In part, because IT is having so much trouble coming up with funding for large capital-intensive projects. Why bother when Google, Microsoft, Salesforce.com, Amazon.com and others have already made the investment for you?

While we're talking about money, you need to know what people who invest it are thinking. If you're working at a startup in Silicon Valley (or anywhere) looking for venture capital to fund your big idea, and your business plan includes dollars to build out a data center to run business applications, forget it. Unless that data center is core to your business, VCs will tell you not-so-politely that your ERP, CRM, business intelligence and even your productivity applications better be planned as software as a service or you can kiss your term sheet goodbye.

Emergence Capital Partners in San Mateo, Calif. takes the investment trend a bit further. It invests exclusively in "technology-enabled services" ventures such as SaaS companies. According to Gordon Ritter, a partner with Emergence, cloud computing is "sea change" for the venture capitalist.

The wind does seem to be in Emergence's sails, too. Ritter says that half of the companies his firm's invested in outperformed expectations last quarter. This contrasts sharply with a different VC I know who invests in more traditional packaged software and hardware companies. I had dinner with him recently where he told me of cutbacks, revenue shortfalls and layoffs.

I think the sky's the limit for cloud computing in the next few years. It may be one of the few sunny places for developers to seek their fortunes.