Conclusion

Software as a service:
1. Companies stop installing software on PCs (gmail, gdocs, ...). PCs only run a browser.
2. All data and apps live in the cloud: Microsoft's Live Mesh.
3. PC's give way to specialized clients: handhelds, 3D workstations, multimedia monsters, 9 screen programming stations.
You will write software to run on the cloud: 1 server and multiple types of front and backends.
This software will be much more about communication and information (gmail, facebook, flickr) than about data manipulation (word, excel).
“All applications will grow to recognize and utilize the inherent group-forming aspects of their connection to the web, in ways that will become fundamental to our experiences. In scenarios ranging from productivity to media and entertainment, social mesh notions of linking, sharing, ranking and tagging will become as familiar as File, Edit and View.”
memo from Ray Ozzie, Microsoft Chief Software architect.
Transition from desktop to cloud: prism.
Desktop apps continue to exist: this is new functionality, not competition!