Buy software? How passé.

The personal-computer revolution for many Americans began in 1984, when their TV screens glowed with the surreal image of a woman in red track shoes, hurling a sledgehammer to shatter a huge video screen of a man preaching conformity.

That Super Bowl ad, Apple's dig at the IBM PC, suggested a big idea: that personal computers could liberate users from the tyranny of centralized mainframe computers, which controlled and limited what they could do.

Nearly a quarter century later, a counterrevolution is in full swing. Known as "cloud computing," it offers liberation of a different sort: the ability to access and share data anytime and anywhere via everything from a cellphone to a full-blown computer. But achieving that vision requires reliance on networks run by huge centralized clusters of computers reminiscent of the mainframes of the 1970s. This battle of visions is playing out in the corporate strategies of the world's largest high-tech companies, with billions of dollars of revenue at stake.

So far, the counterrevolutionaries seem to have the momentum.

"The 1970s are back, break out your bell bottoms," says David Utter, a staff writer for the technology website WebPro News. "It's not going away – the desktop model [of the late 20th century]. But there are going to be a lot of people, particularly younger ones [and] people who are mobile, who are going to embrace the online model a lot more."

Which side you're on depends on where your software and data sits. In the traditional model, people buy software and load it on the hard drives of their personal computers. In the new era, users' software and data sits on the network.

A simple program like Google Calendar illustrates the potential of online applications. The digital datebook resides on a Google server, eliminating the need to synch between a phone and different computers. More importantly, a calendar can be viewed by chosen friends and colleagues, or even made open to editing by a spouse.

That ability to share information easily is proving so powerful that even Adobe, maker of sophisticated image editing software, feels competition from the much simpler photo touch-up tools offered by sites like Flickr.com, says Nick Carr, author of the forthcoming book "The Big Switch: Rewiring the World from Edison to Google."

Not surprisingly, Adobe announced last week that it will take its popular software products like Photoshop and create online versions of them in coming years. The social-networking website Facebook already boasts more than 6,000 online applications since May, including core tools like word processing.

"Another advantage is that, all of a sudden, the user doesn't really have to worry about installing the software, troubleshooting the software, and updating the software, because it's all done centrally," adds Mr. Carr.

Business applications are moving online, albeit more slowly.

Salesforce, a company based in San Francisco, sells subscriptions to online databases for managing customer relations. With the data standardized and residing on Salesforce's computers, clients using the system can share information like leads in ways similar to friends on MySpace or Facebook. Some of the giants in the business software industry, like SAP, have recently announced similar moves online.

The biggest battle is shaping up between Microsoft and Google. Microsoft made a fortune selling software to individuals for their personal computers.

Now, Google is offering free online versions of similar software, such as wordprocessing and spreadsheet programs. The advantage? The online versions allow easy collaboration over the Internet.

These moves have forced Microsoft to develop easy online-sharing options for its traditional Office programs, such as Word. Meanwhile, under a deal announced Wednesday, the company edged out other suitors like Google to invest $240 million for a 1.6 percent stake in Facebook. Facebook represents not just an important advertising space, but also perhaps a platform for software. The applications on Facebook raise the intriguing possibility that one day people may treat their Facebook page much like their current desktop.

To be sure, the idea of running software and storing files on a series of faraway computers – or "clouds" – raises privacy and security concerns. And few experts say that the online model will push the traditional one into extinction.

"I find it unlikely that everybody is going to sit inside Facebook and do all their computing," says Carr. "But they certainly might access some of the applications they use through there."

But Microsoft has tremendous resources to buy out competitors or transform itself should it need to. Some analysts doubt the company really faces such a serious threat.

"Think about the number of times that your network just doesn't work, period," says Michael Gartenberg, an analyst with Jupiter Research. Consumers aren't going to move away completely from working off hard drives, he adds, nor do they need to since many offline applications can comfortably incorporate online components, he says.

No one foresees the demise of the hard drive and the mass adoption of "dumb" laptops minimally configured for Internet access. But hard drives may be used less for storage and more as a cache – a place to preload information that a user is likely to request.

Such tricks could be important as more and more heavy programming tasks are completed over the Internet. That Adobe could even propose turning a memory-intensive program like Photoshop into an online service speaks volumes about the capacity of computer clusters to challenge the speed of software running on personal computers.