The rising generation of programmers isn't being fed .Net and Windows. It's growing strong on Linux and its associated LAMP stack, as Robert Guth of the Wall Street Journal notes. Microsoft thinks it has an answer to this trend toward Linux. It is very telling how far from reality Microsoft is by its response:
Microsoft hasn't been a player in the Net start-up world, in part because of the cost of its server product. Mr. Hilf tells [the WSJ] that Microsoft is trying to fix that with new licensing schemes that make Windows Server more affordable for start-ups....
The technology has also been a hindrance, which Mr. Hilf says Microsoft tried to overcome by making additions to Windows Server 2008 that might appeal to Linux programmers who want better access to the technical guts of the software. Such changes "will be a big impact to that next-generation Facebook," Mr. Hilf says.
Well, no, Bill. Such changes are largely irrelevant at this point. You've already lost the mindshare war, and tepid changes to Microsoft's server licensing policies won't change things, either. Your company's limp olive branch to the open-source community ("You can use our software royalty-free and without fear of legal retribution...so long as you never make a penny from your efforts") is worse than insulting.
Microsoft's model is perfect for the client/server model that it helped to pioneer. It is irrelevant for the web-enabled future that is being built even as I type. This new world looks more like Firefox: platform agnostic. It doesn't care if people run Windows. Neither should you.