Microsoft's biggest threat is itself. As with any business model, If it the best that there is, their is no real threat from a business model elsewhere. If, However, is not the best then the business is left open to real competition.

If Microsoft's hotmail was the best we would not have Gmail, and the others. If Microsoft's Windows was the best then there would be no need for Linux occupying hard drives in a great deal of servers or Apple's OS X, high premium, consumer computers. The fact that all these options exist on the market, or where not taken as real competition only a few years ago, shows that what is hurting Microsoft is there own inability to fill the need of customers.

This is not fan-boyism or Microsoft hating. It is just the facts. If Vista was as stable as OS X or Linux, with the ease of use OS X, and the freedom of customization with Linux, Microsoft would have no competition in the OS market, at least.