I think this guy has some good advice for Steve Ballmer.
Here's my suggestion for how Microsoft should deal with Linux: Don't beat 'em, join 'em.
Do a release of MS Linux. Create Office for Linux. Improve Linux support in your development tools. Do such a good job of embracing and extending Linux that the world won't care when you essentially annex it for your own. A more cynical person than myself might add: Then you can kill it. I won't, because I believe Linux deserves to live.
I think this is the only way Microsoft can both give its customers what they want and manage the threat Linux poses on something approaching your own terms.
I agree. That would be a great strategy for Microsoft. There are some significant risks, like harming Microsoft's proprietary stuff, but it all boils down to making money, right? That is done by giving customers what they want. I think this would improve Microsoft's ability to serve it's customers, and that would show up in the bottom line.