Paul Graham has declared that "Microsoft is Dead"! Actually, despite his provocative title, my title to this Blog post is much closer to what he actually is saying: Microsoft is "dead" the same way IBM is "dead". IBM really doesn't drive the technology world like they used to anymore, but they are still a major company that makes many millions of dollars of profit a year. And he gives several reasons for why he thinks Microsoft is "dead" in much the same way, including that Google is becoming the "top dog", for better or for worse, in technology, the rise in prominences of Web 2.0 technology (Like AJAX and the software that use it, like Gmail) that work in any browser in any O.S., and that the newer generation of startups that he sees are, increasingly, using Apple OS X, Linux, or otherwise non-Microsoft O.S.es to run their businesses, such that Paul himself is surprised when he comes across a Windows system!
That last point is something I'm starting to notice too. The company I work for primarily hosts Linux servers in the building, with a Windows 2003 server to provide LDAP authentication and security for other systems, often running on Linux, or the occasional Windows server if a client requires it. Also, most new tech people I come across, even if they primarily run Windows, are quite eager to "give Linux a try", especially when I show off the Beryl desktop running on the laptop I'm writing this entry on.
There's also another indications of Microsoft fading out that Paul didn't mention: Dell making noise about offering Desktops and Notebooks with Linux preinstalled. Sure, this is simply Dell taking a chance at offering something to a rather niche market, and Dell have been offering Red Hat or Suse Linux preinstalls on their Business line of servers. But the fact that they're making this chance and getting a fair amount of publicity from this in the "geek" world might be an indication that Microsoft doesn't have the hold on them that the software giant used to.
So, no, Microsoft won't simply "die" in the sense that most people think of the word; they will likely stay in the technology world as a major player for a long time like IBM, Sun, etc. But I think Paul Graham is right: Microsoft doesn't drive the technology world anymore, and probably hasn't for a few years now. As for who's top dog? My money would be on Google right now, but who know how long that will last and who will overtake them.
Oh, from the Slashdot post that linked to the Paul Graham piece, this comment has made quote of the day for me: "MSFT reminds me of some 40 year old guy who thinks he's cool hitting on his daughter's college friends. He's the only one who doesn't realize he's creepy and pathetic."
April 9th UPDATE: Paul Graham fully explains what he means by "Microsoft is Dead", which largely agrees with what I said above.