I must admit I am a little puzzled by all the recent analyst talk about how the personal computer is going away for good soon. I must have read a dozen articles yesterday asserting that tablets are the end game for the PC business. Barron's asks, "Will Tablets Kill The PC Star?" But the PC star has been slowly dying for a while now, and the tablet is just another small cog in the cloud that is driving the process.

Analysts produce tablet headlines
Numerous analyst reports released on Monday pointed to large cannibalization of PC sales as a result of increased tablet usage. The most influential report comes from research firm Gartner, cutting its global PC demand forecast for 2010 and 2011. The research firm now expects 352.4 million units will ship this year, which is an increase of 14.3% over the previous year, but also down 3.5% from previous estimates. Gartner expects sales to increase to 408 million units in 2011, which marks 15.9% growth over 2010, but is also lower than the 18.1% previously predicted. This is a pretty large downgrade of expectations.

In addition, Citigroup cut its forecast for 2011 PC growth from 12% to 9%, saying that tablet sales will effectively eliminate 11 million PC sales next year. Finally, even more bearish on the PC market is FBR Capital markets analyst Craig Berger, who estimates that every 2.5 tablets sold eliminates 1 PC sale.

Lots of confidence, little history
While I don't disagree that PC sales are on a perpetual decline, I believe the tablet story is somewhat overblown. Last time I checked, there were only two viable tablets on the market, Apple's (Nasdaq: AAPL) iPad and a product made by Samsung that I don't think I will ever see outside of advertisements. There will be new tablets released next year by Research In Motion (Nasdaq: RIMM), Cisco (Nasdaq: CSCO), Motorola, and a host of other devices that run on Google's Android operating system. However, who really knows if these devices will be able to compete with the iPad? I don't think consumers and businesses will be forming lines outside of retailers.

It is really a confluence of technology and the recent economic conditions that have hurt the PC industry. Consumers have certainly cut back, unemployment remains high, and for businesses, fewer workers and constrained budgets mean less is spent on personal computers.

The big cloud
While a sluggish economy will continue to affect PC sales, I believe the real death blow to the industry comes from the entire cloud-computing renaissance that is making traditional hardware purchases unnecessary for consumers and especially businesses. Sure, this includes tablet devices, but they make up only a small part of the shift.

While Gartner focused on consumer tablet proliferation in its research report, it addressed the uptake of thin clients or hosted virtual desktops (HVDs) near the end of the report. Running virtual desktops allows businesses to run all of their individual operating systems through backend servers. Virtualization lets companies not only save on server costs (through higher utilization), but also on PC hardware as desktops rely more on servers to do the heavy lifting. That allows companies to either upgrade less often, or buy cheaper PC systems for employees.

This shift will continue to benefit leaders in virtualization like VMware (NYSE: VMW) and Citrix (Nasdaq: CTXS), while traditional PC makers Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ) better continue to make inroads into the world of software, as they stand to lose significant revenue from a continuous decline in PC sales.

The headlines tell an old story
It's not that tablets aren't a significant growth story for companies that can compete with Apple's iPad. However, the tablet itself has had little to do with the decline of the personal computer industry, and is only one piece of the larger cloud-computing and virtualization theme that has been gathering momentum for years. In the end, it's the cloud that will be the driver behind the thin client concept that could further propel tablet sales.

It will certainly be interesting to see who the winners and losers will be in the tablet space. Both HP and Dell also have tablets scheduled for release in 2011 and who knows, an innovative product may be in the offing, just like in the good old days. However, it will be more important for investors to watch which companies are able to adapt to the bigger cloud that is growing over the entire technology industry.

Andrew Bond owns no shares in the companies listed. Apple is a Motley Fool Stock Advisor pick. Google is a Motley Fool Inside Value pick. Google and VMware are Motley Fool Rule Breakers picks. The Fool owns shares of Apple and Google. You can follow Andrew on Twitter @Bond0 or on his RSS feed. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.