Now that Salesforce.com has proved that SaaS (software-as-a-service) is a successful business model, the company hopes to lead the way in cloud computing.

Many in the software industry consider cloud computing -- offering a development infrastructure as a service -- to be the next step in the move away from packaged software.

Salesforce.com Chairman and CEO Marc Benioff stopped in New York this week to proselytize about why customers should use his company's Force.com platform, which offers application development in the cloud, over traditional application-development infrastructure.

Benioff is well-known for promoting his company's service-oriented strategy as the wave of the future, and he has positioned Force.com as the greatest thing to happen to application development since Visual Basic. However, given the emerging trend toward platform-as-a-service, Benioff and company appear to be on to something.

Salesforce.com's hosted development platform is gaining traction among companies that don't want to spend time and money investing in on-premise software infrastructure or for those that can't afford to because of budget constraints, said business customers who have used Force.com.

And as business customers become more comfortable with hosting and developing applications in the cloud, Force.com could displace traditional on-premise development infrastructure offered by the likes of Microsoft, Oracle and IBM for some customers, especially those in the small and midsize business market.

Platform-as-a-service got a big boost last week when Google introduced App Engine, joining Salesforce.com and Amazon.com, with its Elastic Compute Cloud (EC2), as early entrants in the space. However, neither Amazon.com nor Google is particularly focused on business customers, which is what differentiates Salesforce.com and could give it a better chance of competing with Microsoft and IBM for corporate developers.

Still, customers and analysts cite a few key challenges for persuading businesses to build applications on a hosted platform like Salesforce.com's or Google's. Among them, according to RedMonk analyst Michael Cote, is that a traditional IT department will feel displaced when managers inform them their coding skills and abilities to integrate complex development infrastructure are no longer needed.

The IDG News Service is a Network World affiliate.