It’s been a remarkable year, even discounting the hype, and as it comes to a close we find the entire traditional IT industry in a weirdly precarious position. In some ways, the traditional vendors seem to be going about their business in traditional ways, selling lots of gear and software licenses and maintenance contracts, pushing upgrades and service agreements – and making a pretty penny off all of it. And yet the entire enterprise seems increasingly unreal. Watching the IT business today feels kind of like watching one of those Roadrunner cartoons when Wile E. Coyote would race off a cliff and manage to tread air for a few long seconds, his legs moving in a blur, his mind not quite registering the fact that the ground had disappeared from beneath him.

Yesterday, Google put a suitable exclamation point to the end of 2006 when it announced that it was adding a domain registration option to its Apps for Your Domain service. Small businesses, schools, and other organizations will now be able to buy and set up a domain when they sign up for the Google service. And the other elements of that service will be immediately and automatically configured to run on that domain. The cost for the registration is a flat $10 a year. There’s nothing at all interesting about that price – it’s pretty much what you’d pay if you registered your domain yourself (and Microsoft will even give you a domain for free through its Office Live service). But I find that, by further simplifying the creation of what amounts to a virtual data center, the move brings into clearer view the future landscape of business IT.

It’s pretty amazing to think about what a company can now get for $10 a year:

A complete, web-based IT infrastructure for its business A custom corporate portal/intranet for its employees Corporate e-mail service Corporate instant messaging Calendar software and services Web-site design software Web-site hosting

And, by incorporating some other free Google services, the company also gets:

Word-processing software Spreadsheet software Web-site analytics

All the necessary storage, data backups, security, maintenance, and related services are included in the $10 price.

Other than some cheap PCs, a printer, and maybe a bookkeeping application, that pretty much covers all the information technology that most companies on earth require to run their businesses. (And I’ll bet the bookkeeping app will arrive soon, perhaps through a partnership with Intuit.) So, if you’re a small business or a school or a nonprofit, that’s your new annual IT budget: ten bucks. Why spend more?

And if you’re a bigger company, don’t fret. As competition among Google, Microsoft, and many others heats up, innovation in software services will only accelerate. This is just the beginning.

Beep beep.