Is Microsoft Dead?

I can remember moving to the Seattle area in 1997 and being advised that Sun, Apple, IBM, and the various Linux concerns were all dead; they just didn't know it. Microsoft had won, and that's all there was to it. Is Paul Graham's essay about Microsoft similarly accurate? I would say that you ignore Mr. Graham at your own risk. He has also written a follow-up, Cliff's Notes version in which he emphasizes that what he means is that software startups no longer need worry about Microsoft. And this in turn reminded me of software startup proposals in the early to mid '90s, in which the mere rumor that Microsoft would do something even vaguely similar was enough to eliminate any chance of financial backing. You just couldn't compete with Microsoft. These days, the issue isn't whether one can compete successfully with Microsoft, but rather that Microsoft is no longer a credible source of new ideas. The best they can do (as Mr. Graham says) is buy them. And, sometimes, even that doesn't help.