Oracle. Salesforce.com. NetSuite. Except maybe for the first one, these are the most popular companies you may have never heard about.

That’s because unlike popular consumer-oriented companies like Microsoft or Apple, these software operators power businesses, and the back-end processes at that. They play their own turf wars and have their share of celebrities, supersized egos, battlefields, and futures to color their respective worlds.

But there is one thing these companies agree on, and that is the growing trend that software-as-a-product may be reaching the conclusion of its dominance. Sure they’ll still be around decades hence, but the majority of their use won’t be in packageware as they have been since the heydays of the computer revolution, but rather the growing relentless trend toward the concept of software as a service instead.

The idea isn’t to let customers buy packaged software then install and configure them themselves-- or in the case of businesses, with the help of consultants (paid separately of course) whose interest it is to keep things sophisticated and difficult lest they go out of business-- but rather to just lease applications with a monthly or regular fee rather than pay licensing fees up-front and deal with the many costs and headaches after. This frees a company from the many costs involved in purchases, installation, maintenance, upgrades and everything else they call the “total cost of ownership.”

In the new model (which isn’t really new as it’s a concept many years already in the making, but that’s another story), companies pay these software service providers a fee so that they do the rest, including new installations, provide updates delivered via the Internet, and so on, seamlessly and in a relatively frictionless manner.

What’s more, instead of buying whole integrated packages in one gulp, customers have the option to purchase only what they need, and just adding more modules as the need (or affordability) arises, a concept more popularly known as “On Demand” services. It isn’t exactly as rosy or utopian as that may sound, but generally its supporters claim a huge success in results.

Salesforce.com is known mostly for its customer relationship management offering (a.k.a. CRM), while NetSuite has a broader smorgasboard of sorts. Oracle on the other hand, which happens to be the world’s largest database developer, has warmed up to the concept long before, even though it stands at risk of cannibalizing the sales of its flagship database and business applications software products if the software-as-service concept continues to take hold, which it has.

But there is also something interesting about this trinity, and that is because both companies started out from within the orbit of Oracle Corporation. First, both companies’ founders were former protégés of Oracle CEO Larry Ellison, and secondly, Ellison was among the earliest and largest investors of both companies.

As with many people linked to Oracle, their stories are brimming with battle scars and war stories, with Marc Beniof, Salesforce.com’s CEO quoting from the Art of War (an Ellison favorite), and kicking out Ellison from the board of Salesforce.com after a scuffle where Ellison was accused of stealing ideas from the company and throwing them to Oracle.

It also didn’t help that Oracle has been making good its prediction of the software industry consolidating by purchasing rivals like PeopleSoft and Siebel-- yet another couple of companies run by former Oracle soldiers. This has resulted in bitter words from the extroverted and gregarious Beniof (who’s stake in Salesforce.com is worth about $650 million, from the company’s market value of about $2.6 billion, making him one “frustrated billionaire”) who naturally has the most to lose, particularly since these companies are in the same CRM space Salesforce.com is competing.

Evan Goldberg, founder and who now chairs NetSuite, is in better relations with Ellison, with his company is regularly in the crosshairs of former Oracle cohort Beniof at Salesforce.com, even though both men dance the delicate balance of friendship (Beniof in fact ministered Goldberg’s wedding in 1998) and trying to go for each other’s throats.

The rise of on-demand services is projected by the IDC to reach $10.7 billion in 2009, and while this amount may seem like peanuts to the elephant that is Oracle, it is still delicious fare nevertheless.

In fact, it has gotten to a point where other heavyweights are taking notice and thumping their chests into the market.

Microsoft of one, nervous about how the ‘software-as-service’ concept could threaten its iron grip on the operating system and business suite (Windows and Office Suite, respectively) software, recently went through a very public reshuffling of management to take on this threat (possibly giving it the same DefCon level as Google), and talking up several initiatives to take advantage of the growing trend.

Oracle’s arch rival in the corporate software field, SAP AG, is also said to be working on similar initiatives, as well as several startups that include RightNow Technologies.

Ellison still owns majority control of NetSuite (something he lost in Salesforce after it went public), which is still smaller than rival Salesforce.com, which has more than 300,000 subscribers and expected to have more than $300 million in revenue for its fiscal year ended January 2006. But Ellison’s control ensures NetSuite doesn’t get into the hands of Ellison’s nemeses in Redmond, and while he may not have a stranglehold of control in Salesforce.com, his stake in the company has grown from $2 million to something worth about $100 million.

And Ellison has the cards in his favor. NetSuite is a very strong player in the new industry, and Oracle is still a veritable giant in the business software scene, making strong inroads in ‘on-demand’ software.

Best of all, NetSuite has yet to go public. Currently smaller than Salesforce.com, one of its strengths is in the diversity and integration of its offerings, being a one-stop shop for online applicatons (hence its name), which is expected to reach $70 million in revenue this year, giving it a nice glittering sheen for its IPO in 2006.

Which only adds to more color in the rapidly burgeoning industry of on-demand software applications that for what it’s worth, will at least herald the arrival of lesser sales of Aspirin for corporate CIOs everywhere, and more so for smaller businesspeople who until now were mostly ignored by corporate providers, and who may now enjoy similar world-class benefits as the big boys do.

As if that wasn't enough reason to rejoice, now with Ellison et al in the picture, it's one industry that's sure to have a very entertaining ride.

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