I just read a nice review of the application software market in 2007, published by the 451 Group. While it was a good read, I think it left out a couple important factors that affected, or will affect, the market significantly.

While not an application in itself, the iPhone and more importantly the mobile Safari browser, may stir the most change in applications and how users access data and interact with a system. Now, before I go further, I must state that I do not own an iPhone, and have no immediate plans to do so (not even as the holiday season looms). In fact, I was one of the many who blasted the iPhone as hype and a smoke and mirrors approach to mobile innovation.

But I was wrong. The browser on the iPhone allows users to actually utilize web-native applications in a more robust and meaningful fashion. Now, I don’t think that we will be able to access browser-based apps in exactly the same way on these next-generation browsers. But with the storage ability, faster processors, and feature-rich browsers – web apps with just a touch of a client (for disconnected use and performance) can penetrate a variety of industries and lines of business in a horizontal fashion.

Of course there are issues with the iPhone itself – I don’t see it as enterprise ready and it is of course limited in terms of networks. But what the iPhone started, business application vendors and device manufacturers could finish – in a very big way.