Five years ago, if Hewlett-Packard (HPQ) bought Electronic Data Systems (EDS), everyone would've thought it was pretty much like when IBM bought PwC -- a play to create a powerful data processing consulting business that could co-exist with a computer hardware business. In fact, that's been a great model for IBM (IBM).

But with H-P now buying EDS for $12 billion, the smart thinking goes in a different direction. It's looking like a red-hot area going forward for IBM, Amazon (AMZN) and Google (GOOG) will be so-called cloud computing -- a.k.a. hardware as a service.

If you're a start-up or a corporate IT manager, you increasingly won't have to buy computers to run your business. You just rent capabilities from some computing giant and move the information there and back over the Internet. If something crashes, the data is always backed up and stored somewhere out there in the cloud. This is the ubiquitous computing idea IBM has pushed for a decade -- making computer power something like electric power.

If you tack together some of H-P's other purchases under CEO Mark Hurd -- as Om Malik did -- it seems even more obvious that H-P is at least as interested in cloud computing as consulting. And EDS is a solid cloud-computing play because a core business is owning and running giant data centers.

As part of the interview I did with Amazon CEO Jeff Bezos (the video is now on Portfolio.com), we discussed Amazon's push into cloud computing.

"We've been working on our Infrastructure Web Services for four years," Bezos said. "We launched our first one two years ago, the Simple Storage Service, and I am astonished - I rarely meet a start up company these days who isn't using our web services and now we're starting to get, you know, deployment inside Enterprise level data centers as well. So it's very exciting."

Asked about Google's plans to get into a similar business, Bezos said:

Well, you know, the way I look at this and, you know, we don't - we really do have a practice of not talking about other companies. But this, like our retail business, is not going to be one winner, I don't think. I think there are going to be multiple winners pursuing different flavors or strategies, different kinds of products, you know, I think that this - I think our web services business is going to be part of what becomes an important industry. And I don't think important industry - important industries are rarely made by single companies.

So maybe there is room for H-P, Amazon, IBM, Google and others to play in the cloud computing space. The H-P deal is telling us that the concept is ready for prime time.

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Kevin Maney

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