What Would MS Do?
Microsoft is trying desperately hard to find a business model that fits with the post-desktop PC era. Their entire strategy depends on the idea that software is something that you buy and install on one machine.
Microsoft’s forays into the mobile arena so far have been uninspiring. They have pushed Windows CE, which makes the same UI mistakes as desktop Windows (and a few new ones), into a smaller device. The additional license restrictions in Vista make it clear that they still haven’t woken up to the idea that a static desktop operating environment has only a very limited shelf life.
If the Free Software community continues to fight the last war and build a desktop environment, they might wake up in time and produce something for the post-desktop PC world. (Singularity looks promising in this regard, if they can find some workable licensing terms.) Microsoft has adapted to new environments before. They started selling a BASIC interpreter; then moved on to operating systems, GUIs, and even office suites.
Currently, however, the Free Software community has a huge advantage. The open licensing model is a lot more attractive in the post-desktop PC era than increasingly restrictive proprietary EULAs, as long as the software has the required quality.