I've been watching the software wars since I was a child, which means when Bill Gates was a child, which means before Microsoft existed. The changes have been nothing less than astonishing. The next big thing, some people think, is applications that both sit on your desktop and run off the Web.
Before microcomputers everything ran on a central computer, first mainframes and then sometimes minicomputers. With the introduction of spreadsheets on microcomputers it became possible for ordinary people to become highly productive on a computer they controlled. In the late 1980's Microsoft emerged as king of the personal computer business application - spreadsheets for bookkeeping and analysis, databases for mailing lists, and word processing for letters and reports. At the same time Apple and Adobe came to dominate what might be called the creative side: graphics and sound, including publication layout.
At the same time networking PCs, both to each other and central computers became popular. In the mid 1990's the Internet went mainstream. Web page layout became a big deal. But open-source and standards-based protocols emerged as rivals to proprietary players like Adobe and Microsoft.
Today Adobe announced the general availability of its much-pre-announced AIR tools. The basic idea is to have applications that can run on your personal computer and also connect to Internet. It is not a new concept, but it is a new battleground. In some ways it is not really very different than Web services, which are available through standard Web browsers.
Aside from a swarm of open-source or Googled up small competitors, Adobe's big rival is still Microsoft, which introduced a similar Silverlight toolkit in 2007.
I think Microsoft has the main advantage here. It has had ASP and .NET technology for connecting PCs to servers, including Web servers, for years. The focus of ASP/.NET programmers has always been getting business data to end users. Of course you can also do that with Java and Linux, if you can get volunteers or can afford to pay that sort of brain power.
Adobe now has absorbed the old Macromedia products like Dreamweaver into its creative suites. Adobe has great technology. I use Dreamweaver to lay out my Web pages (though this blog is done within Google's blogging online service). When it comes to visual presentation, Adobe has a strong lead. So you are likely to see AIR backed by creative professionals, including advertising agencies.
What are the chances of merging Microsoft's business oriented back-end with Adobe's eye candy front ends? It is possible, but then you are dealing with two proprietary systems.
The real solution for us all would be high-end open source systems. But the money is not there. Open source mostly seems to work well when the real work is done by professionals at companies like Sun and Red Hat. So Linux is great if you are deploying a server farm, and it is a great way to share code, but commercial sites are going to continue to be built with expensive, professionally developed tools.
As in the past, Microsoft and Adobe will probably both come out winners. Microsoft's installed Windows/Office base, deep programming knowledge (Visual Studio), database expertise and ability to redeploy vast resources as necessary will keep it in the game. Adobe AIR builds on Flash and other great technologies and a general graphical advantage, plus a huge Acrobat installed base. I imagine most programmers and designers will stay in the camp they are in.
If you are an investor you can see my financial commentary on Adobe (ADBE) and Microsoft (MSFT) at:
My main Adobe page
My main Microsoft page