Forget the traditional user interface. The looming battle in the information technology business is over control of the utility interface.

As companies shift toward purchasing software applications as services from utility suppliers, rather than installing them on their own computers, the demand for an easy way to manage and coordinate all those applications will only grow. If integrating rented software becomes as complicated and expensive a task as integrating owned software is today, companies will have gained little in moving to the utility model. That’s why creating a flexible, user-friendly utility interface is so important.

For suppliers, the stakes are enormous. Control over the utility interface will provide an IT vendor with the kind of power that Microsoft has long held through its control of the PC user interface. And Microsoft will certainly be in the fight for control of the utility interface. The company has already made one big mistake, however. By taking the dominance of its web browser, Internet Explorer, for granted, it created a big opening for alternatives like Firefox. Because the browser may well provide the window for the utility interface, Microsoft may rue its failure to make browser innovation a priority. On the other hand, Microsoft is making smart moves to position its Office suite as an interface for managing business applications. After recently teaming up with SAP to turn Office into a front end for the leading enterprise resource planning (ERP) system, Microsoft last week announced similar partnerships with i2 Technologies, a maker of supply chain software, and Interwoven, a supplier of document management applications. Watch for it to attempt similar moves with hosted applications.

Other traditional business vendors will also be in the fray. IBM, for instance, is making a big push to position itself as the integrator of choice for hosted apps. But it’s the dark horses that are particularly interesting. Google is positioning itself as a utility interface on the consumer side (though so far only with its own applications) and could try to move into the enterprise space as well. Then there’s pure-play Grand Central Communications, led by CNET founder Halsey Minor. It’s turning application integration itself into a utility service. As an independent third party, Grand Central has appeal to both the providers of the applications and the users. And it has an early lead as the virtual middleman. But whether its first-mover advantage will be enough to withstand the inevitable onslaught from the big guys remains to be seen.