Adobe says that it wants to be between the PC and the cloud and produce software that uses the best of both worlds.

Adobe Chief Technology Officer Kevin Lynch said that a balance of the client and cloud makes for the most effective applications and the best development. He said that Flash and AIR are key to bridging the cloud-PC gap. For example, Adobe has launched an online Photoshop.com service, where members can upload, edit, and share photos.

The site uses Flash to run the processing-intensive editing software on people's own computers, not Adobe's servers, he said. Lynch said that operational costs for hosting that application are much lower than if we had server-side processing," and users get better performance. While Flash still lives largely within the browser, Adobe hopes to uproot it with AIR, a "runtime" foundation for housing applications.

This would see AIR running Flash programs but also has a built-in engine for showing Web pages and for running programs written in JavaScript, which is widely used for Web-based applications. Lynch admits that there is a risk choosing a hybrid strategy.  While it is all nice and flexibile there are losses in specialization.

Full interview here.