Mendels: The fundamental issue is cross-platform. There's almost no one I talk to who doesn't want to either be heterogeneous and work on Linux or Mac or Windows, or want the option in the future to do that.... If developers want to build things, express themselves heterogeneously across the Web, across devices, you know, that isn't Microsoft's strength. They've got a lot of strengths, but that's not their strength. Their big opportunity is people who have a Microsoft end-to-end environment.

IDG: Adobe has a long history as a software company -- over the years, how have you seen business models in software change?

Narayen: If you think about the company, it's actually changed very dramatically over these 25 years. We started with a completely royalty model. With Postscript, we had HP and IBM and Apple as large customers, and that was the business model, royalty based. And we built a very successful applications business on top of that. And then we moved into the enterprise, and that's license revenue, it's consulting services, etcetera.... So we already today have some very different business models all sort of coexisting in our overall company's financial model, which is clearly very successful and profitable one. Clearly, we see the trend toward both delivery of software through hosted mechanisms and subscriptions and the ability to monetize it differently. Second is the need for us, for a certain set of customers, to not monetize it by charging them for it but through other advertising mechanisms.... It's the spectrum of delivery and business models. Piracy is huge for us in other countries, and that [advertising-supported model] is a way in certain countries to also monetize.

IDG: What might be some applications you could offer in this way?

Narayen: Well, take video. With YouTube, right now people just have the ability to upload a video. Wouldn't it be really cool if we provided something that enabled people to do basic video editing through a hosted service, or image editing through a hosted service, or even run your entire enterprise offerings as a hosted service?

(IDG News Service Senior Writer China Martens and Infoworld Assistant News Editor Paul Roberts joined Heichler in conducting the interview in Boston.)