VMWare has VMPlayer, which is kind of similar. You can package up your app with a whole OS, and let people try it. Without the having to install the application (just VMPlayer).
Not quite the same, but for some cases it works pretty well.
If your application is written with WPF (Windows Presentation Foundation), then you can easily have a version with limited functionality done with Silverlight.
If you have it written in Swing (Java GUI) then having it work as an applet is easy.
I have seen various companies allow you to see a demo of their software, or play with a part of it, mainly a very limited subset, at times.
I don't know what you mean by competitors in this space, unless you are looking for companies that allow other companies to do this, then your competitors would be Oracle (Sun) and MS, as they make it easy to allow people to test.
There are other frameworks that easily switch from a web demo to an installed application.