My problem with this essay is that it could just as well have been written in 1985, 1990, 1995 or 2000. Microsoft has always been slow in responding to new threats.
1985: Windows 1.0 was a totally insufficient response to the Macintosh. There were plenty of other Window Managers too, all superior (oops, not Topview, now that was an inferior product). Lotus and Borland is going to kill Microsoft with superior applications. 1990: Microsoft put out Windows 3.0. Still DOS inside. ACE consortium wants to kill Microsoft with Motif. 1995: Netscape is the latest presumptive Microsoft killer, IE is an inferior product. Sun unveils Java, purported Microsoft killer. Windows 95 looks nice, still very much DOS at heart. Constant refrain during the latter 90's: Desktop Linux is going to kill Microsoft... 2000- The Web/Sony is going to kill Microsoft.
And it's not like the cool kids ran Microsoft products in 1990 or 1995 either. The tastes of an elite doesn't necessarily reflect the future of the broader market.As long as Apple won't let you run OSX on non-Apple hardware it can't be anything but a niche product.
Sure, Microsoft is vulnerable, but so is Google or Apple or any other company in this business. I don't know why Microsoft are underestimated so often, it might be that we root so much for the underdog that we fail to see what the big meanies strengths are.