I recall Mr. Gates in the mid to late 90's talking about the impact the Internet was going to have on their business model and their efforts to be at the forefront of that. The problem was, and always has been, that they couldn't and can't change their entrenched business model for a new one. Typical to the Innovator's Dilemna, an entrenched organization cannot easily remodel its' business practices to meet new challenges. IBM has, to some extent, but the premier example is, obviously, Apple. In the cases of IBM and Apple they had to undergo an almost complete demise of the company to fight their way to a new approach. I'm willing to bet that a similar situation will come about in the case of Microsoft. The only question is will they (like the others I mentioned) be able to recover in time or will they be the Wang of this century?