A number of posters are making two mistakes
- Never assume the status quo will last forever
- Few companies sell you software. They sell you the right to use their software.
Microsoft has tried numerous pay-as-you-go schemes over the last few years. They initially saw MMORPGs as a proof of concept for this and did a trial with Office 2000 that flopped. Their current ones focus on hosting applications like Exchange and SQL for businesses.
With the exponential increase in computing power and even linear increases in internet bandwidth I can see this idea working for some in as few as 10 years. By then the dumb terminal installed in a home will have capabilities at least equal to a current high end gaming rig.
Where I see this working is with people like my parents who do not understand their computer to begin with. To them this would be a godsend. No more worrying about viruses, no need to pay to upgrade their software. Just go into the store, buy a cheap terminal (cheap compared to their current computer) and then rent the storage, games and programs they need as they need them.
People like my parents would be the foot in the door. A few years later the business model would become so pervasive that it would eat into the custom PC market. Eventually Custom PCs would become a small niche segment occupied by a few stubborn individualists and maybe some anarchists. We would essentially be back to the old mainframe style market.
Do I believe it likely to happen? I think some variant of it will come about. The only question will be who makes the software for it and who controls the gateways into it. For 'convenience' I am sure Microsoft hopes to be its sole guardian. Who knows, maybe decades from now an AI version of Steve Jobs will unveil their big competitor - the iTerminal dock for the iPhone (or its successor)
