Xcerion AB, an online software developer based in Linkoping, Sweden, this week gave its development platform a new name: Icloud.

Following the launch of a beta test open to a limited number of programmers in the third quarter of 2007, Xcerion has continued to work toward the general release of its XML-based "Cloud OS," a service based on Xcerion XML Internet Operating System/3 (XIOS/3). The announcement of an official name for the service brings the company a step close to that goal; it also certainly reassures investors like Lou Perazzoli, one of the core architects of Microsoft Windows NT, and Terry Drayton, founder of HomeGrocer.com, that Xcerion's technology is almost ready for prime time.

Since details about Xcerion first emerged in early 2007, online software development platforms have proliferated. Between social networks as venues for widgets, Amazon Web Services, Salesforce.com's AppExchange, and custom business software-as-a-service plays like CogHead, you can hardly throw a stone in Silicon Valley without hitting an Internet development platform of some sort. And that's to say nothing of the Web operating systems, or WebTops, that resemble Xcerion's Icloud more closely. These include DesktopTwo, Goowy, EyeOS, G.ho.st, Ultero, and YouOS.

Web operating systems aim to replicate the local desktop computing experience from within a Web browser. Xcerion's Icloud achieves this using an XML-based architecture. Unlike WebTop systems that run applications on remote servers, Icloud relies on an XML virtual machine for local (and offline) operation. It thus combines the advantages of remote computing -- a central point for software distribution, storage, and updates -- with the advantages of local computing -- execution speed and user control without a bandwidth bottleneck.

Icloud offers an intriguing technology that Xcerion is calling "gesture-based computing." Jonas Thornholm, CFO of Xcerion, believes it may be the service's "killer app." Gesture-based computing is essentially real-time content sharing. It allows users to drag and drop documents from their computer to a friend's computer in real time, as if they two machines were dual monitors powered by a single machine.

"You can now show an already opened e-mail to a buddy or a co-worker," explained Thornholm in an e-mail. "You can easy work together on a spreadsheet, develop on an application together, show a photo in real time (instead of having to actually e-mail the same), share a music experience in real time with somebody that you might be chatting with at the same time ... simply by using 'drag and drop' and moving and handling over document, photos, music, or applications in the desktop over multiple screens."

Another point of differentiation between Icloud and other WebTop systems is the breadth of Xcerion's ambitions: It's aiming not just to move the desktop into the Internet "cloud" but also to reinvent the economics of software development. Icloud developers can look forward to an Internet-based marketplace for their Web applications that includes monetization technology. They will be able to offer free, ad-supported, or fee-based software with minimal hassle. At least that's the plan; the company isn't yet ready to discuss the details.

"We believe that as soon as developers discover the inherent potential in combining the ability to make money with open source, and still leave the source open, they will start to love and embrace the openness and extensibility that XML development in Icloud provides," said Daniel Arthursson, CEO of Xcerion, in an e-mail. "Any service or RSS-feed on the Internet lends itself to be mashed up in the Icloud."

Icloud will come with the standard set of productivity applications (word processing, a calendar, a presentation tool, and the like), but Arthursson hopes developers will use these programs to build better ones. Xcerion's challenge will be to attract developers, and doing so will depend a lot on the technical performance of its system. Sluggish data transit to and from servers in the cloud may be enough to send curious programmers back to writing Facebook widgets, Google Gadgets, or whatever their preferred poison happens to be. If Xcerion stumbles here, it won't be long before Google and Microsoft catch up -- both are working to wed the local desktop experience with Internet applications and services.

Much of the Xcerion's success may also hinge on the extent to which it can integrate with existing social networks and create a community of its own. On Facebook, developers arrived after the users came; Xcerion seems to be working in reverse and it's not clear whether end users will find Icloud sufficiently superior to their existing computing options.

Then again, it's hard to find fault with the price. "We really want the system to be free to the general public," said Arthursson.