"Good Luck, Micro$oft!"
It's a win/win for Microsoft and the alternatives. More people will pay for their software, so Microsoft will keep their revenue stream intact.
However, more people will look for alternatives, Apple and Linux. Linux will be the big winner.
The long term effect will be that people, (college kids), who have switched to Linux at home because that's what they could afford, will begin to demand what they've used at home, at work.
Microsoft knows the model well, it worked for them in the early days of the PC when you could steal all the Microsoft stuff you felt inclined to steal.
"The long term effect will be that people, (college kids), who have switched to Linux at home because that's what they could afford, will begin to demand what they've used at home, at work."
That's a big reason why I switched over to Linux. The cost of buying Windows is a hugh turnoff given the ever-rising cost of tuition...
Don't overlook the Rise of the Machine, the virtual machine.
Yes, painless Linux distros like Ubuntu will become popular as hosts for virtual servers. One copy of M$, legal or otherwise, can be duplicated endlessly.
Consumers will have a choice. Patch M$ on the first Tuesday of every month or open a new copy of the virtual, M$ appliance at your leisure, when necessary.