For a long time, the software industry was split between the Software crowd and the Application Service Provider crowd. Software loads and runs locally on your PC/MAC. ASP is software that runs on the server and you interact via a browser. The advantage of the ASP is that they can roll out corrections and new features without you having to install anything locally. The downside was that the browser-based software was severely limited because of client-side programming and browser limitations.
Some great examples: Check out the drag and drop work on this site.
Do you like MS Word? There are some incredible editors out there on the web. Here’s one.
It won’t be long before Application Service Providers will begin to take over. I can envision the day when you rent Microsoft Office for $9.95 a month rather than paying a few hundred for each license.