First Law of Business: If you make a product your customers don’t want, they won’t buy it.
Unless you can squeeze them into it.
In the 1970s, the Big Three US automakers were making, let's be honest, crappy cars. IBM was building pretty crappy computers. But they were the only game in town, and if you went elsewhere, you were hurting for parts and support. You were stuck, captive on the plantation.
It's a different game today. As Sun used to advertise, way ahead of their time, the network is the computer. Mission-critical work is on TCP/IP based servers, accessible by Macs, Windows, Linux, cell phone, or Blackberry. Why discriminate?
In 1981. the IBM PC made desktop computers credible with business; the Apple }{ was popular in homes and schools, but had no corporate cred. Microsoft leveraged its association with IBM, the big swingin' Richard of the day. And for two decades, that was enough to keep them on top -- DOS begat Windows begat Windows 3.1 (the first really usable version) begat Windows 95 begat Windows 98, and so on.
IBM PC/Microsoft DOS became the norm, and held sway because anything else was not compatible. Those days are gone. Any computer can read a PDF. Or HTML. Or CSV, or MP3,. Or even DOC. Open standards are the coin of the realm, and that proprietary jazz won't fly any more.
Microsoft prospered not because it had the best answer, but because it had the most popular. Now, when machines and people are closing in on common languages Microsoft cannot control, its influence is fading.
In this new universe, the next version of windows will have to be, how shall I say this? Good. Which Vista isn't. For a couple decades, M$ could coast on its laurels (yes, I know that's a mixed metaphor) because it held the keys. It would be too difficult and costly to convert from one standard to another.
Today, even M$ has been forced to open its homegrown standards and adopt standards from outside. Windows, Mac, Linux, can all open the same files. Coexist on the same networks. Access the same servers. View the same Web pages. "Microsoft compatible" means precisely jack/squat.
Here and now, in the 21st century, The network is the computer. Windows and Mac and Linux and Solaris mean nothing more than Ford and Chevy and Dodge and BMW. They're all running on the same roads to the same places, using the same fuel.
Microsoft is stuck in the same trap as the Big Three American automakers were in the 1970s. They've been so dominant for so long that they think folks will swallow whatever they ladle. They fail to see that the situation has changed. No hegemony lasts forever.