I'm reading the latest issue of American Libraries (April 2009), and got to Meredith Farkas' column on technology. (Meredith also writes Information Wants to be Free -- one of the first blogs I read, and one of my favorites.)
She talks in the column about the model of SaaS (Software as a Service) for delivering software.
It seems to becoming more prevalent, but I have to admit that it is not new. For a lot of years the technology has moved to having more computing power on the client side of our client/server networks, but not only is it an old idea (remember "mainframes" like Hal in 2001: A Space Odyssey?) but I sure remember the first "live" library automation systems where there were terminals hard wired to the mainframe.
Two jobs ago, my organization was facing a dilemma. We had received "end of life" notices not only for the software for the ILS, but also for the servers on which it was hosted. At the same time a regional library consortium was moving to its next generation of automation system. Because the consortium had purchased powerful enough software, they "sold" space on the server for our data, and we agreed on a cost for maintenance and upgrades (keeping our own license to the system housed on their machine). It was not long after when the consortium took all its servers and put them in/on a server farm (meaning that local power outages did not disrupt operations). All of this happened nearly 5 years ago. For my organization it represented an opportunity to move to new software and abandon hardware while saving money. (Isn't that every administrator's dream -- better and more services at a lower cost?)
So I guess it is an idea that is coming.
What Meredith does not talk about is the possibility of portable applications on a flash drive. In my current position I have a 8-GB "Data Traveler" which has a whole office productivity suite on the drive, so I am not dependent on anyone else's software set up.