In commenting on Oracle’s acquisition of Siebel yesterday, Salesforce.com CEO Marc Benioff drew a compelling, if self-serving, analogy. Oracle, said Benioff, is the new Computer Associates. Just as CA bought up lots of mainframe software makers at the end of the mainframe era, consolidating them and milking their customers, so Oracle is buying up client-server software firms with the intent of sucking the profits out of their (slowly dying) businesses. The consolidation is thus a sign of the close of the client-server age and the dawn of the third great age of business computing – call it the On-Demand Age, or the Utility Age, or what have you.

So what role does Salesforce play in the analogy? Benioff left that unsaid, but Dan Farber connected the dots. With its “AppForce” development platform and its new “AppExchange” marketplace for distributing applications, Salesforce is hoping to position itself as the Microsoft of the new era – the owner of a proprietary software platform that it hopes will become the dominant environment for business computing. The toll for entering the environment is not a Windows license but a Salesforce.com subscription.

What’s most interesting about the analogy to me is the way it illustrates how a technology industry can go through consolidation and disruption at the same time. As the industry’s reigning business model matures, and its core products turn into commodities, traditional players stop focusing on innovation and start focusing on buying customers through acquisitions. It’s the only way they can maintain profit growth as margins shrink and demand growth slows. But as this process plays out, a new business model often emerges, offering customers a cheaper and in the end better alternative. Because the new model destroys the old model’s core source of profits (in this case, software maintenance fees), the old players have trouble adopting it. That leaves them vulnerable to a new wave of entrepreneurs who take up the innovation mantle.