NEW YORK (Fortune) -- Before there was Goo-Tube, there was Googleplex.

Just a few months ago, well before Google (Charts) considered acquiring video-sharing company You Tube, the online search giant was making headlines with its secretive plan to build a two-building data center complex (or, "Googleplex," if you will) in The Dalles, Ore.

As sexy as the $1.65 billion acquisition of You Tube is, the data center project, arguably, is the bigger deal because it is ushering in a big change in the way the $120 billion-a-year software industry delivers its products to customers.

The Google facility, located in a farming community near the Columbia River because of its access to cheap hydroelectrical power, is set to house thousands of servers that power Google searches, and, increasingly, Web-based software applications such as word processing, databases and other fare.

Google rival Microsoft (Charts) is undertaking similar projects -- it is building a 1.4 million-square-foot facility just up the river in Quincy, Wash. -- to handle the massive number of servers needed to help the software company move more of its product line to the Web. (These centers, sometimes called "server farms" because of the rows and rows of computers housed therein, require factory-grade electrical switches and cooling systems, and can cost tens of millions of dollars to build.)

What Google and Microsoft are doing to move applications from the desktop to the 'Net is just the start. In fact, the Internet is making it surprisingly easy for a bunch of new software companies to distribute their products -- and easily upgrade their applications -- without having to spend huge sums. How? By leasing space in data centers especially built to house the servers and other gear of companies that can't build their own Googleplexes.

This week, Entellium, a small, privately held maker of so-called CRM (customer relationship management) software is expected to announce a wide-ranging alliance with data center operator SAVVIS (Charts). The deal, which calls for SAAVIS to essentially run Entellium's entire software suite, shows how a relatively small software company can quickly jump into the same game as some of the biggest names in the tech world. SAVVIS, based in Town & Country, Mo., operates 25 data centers around the world.

"No one is going to want to give you their data if you don't put it across a world-class network, but software startups don't have the money to put in that kind of infrastructure," says Jonathan Crane, president of SAVVIS, speaking of the challenge companies such as Entellium might have faced a few years ago. "We offer a utility platform that gives the customer the flexibility it needs without having the upfront cost of putting the infrastructure together."

By outsourcing the construction and management of the network on which its software rides, Entellium, in turn, says it is able to offer a secure, robust solution to its customers -- mainly budget-conscious small- to medium-sized businesses -- at very affordable prices. Entellium, which competes with perhaps the best-known company in the burgeoning "software as a service" sector, Salesforce.com (Charts), says it charges as little as $50 a month per user for parts of its CRM suite. CRM software helps salespeople manage and track their accounts and leads.

Indeed, much of the software-as-a-service industry is built on the backs of SAVVIS and its competitors. Salesforce.com houses its servers in facilities run by data center operator Equinix. Achieve Healthcare Technologies, a niche player that makes software for long-term care facilities, uses VeriCenter to host, monitor and backup its software solutions.

As it turns out, software delivered via the Web is a pretty tricky thing to do. Not only do the networks have to be tamper-proof, but they also have to be robust enough to handle thousands of simultaneous connections to the network.

"There are very few companies that need to design a system that might have more than 100,000 people doing active transactions," says Paul Johnston, CEO of Entellium. "It is only the software-as-a-service vendors and the Googles of the world that have that kind of technical challenge."

Crane, the SAVVIS president, doesn't see Google as competition for the software startups that his network helps enable, not yet at least. But he does think the tech titan has an important role to play in terms of spreading the gospel of web-based applications.

"The intelligence of the laptop or desktop is moving into the network, and people are going to be more and more comfortable extracting applications from the network," says Crane. "Google and Microsoft will have a tremendous influence in driving that comfort level."

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