A lot depends on whether they can jump the S curves and are able to adapt themselves to the ever changing and ever accelerating pace of technology. But till now I must say that Microsoft had done well.
In the OS market. It is will be so hard to work up a competitior. Linux is doing ok. But It still isnt there. And it will be a while before it is. Although I think eventually google will start making apps etc (Although they already are)., But things like a excel clone etc.
With the rise of Desktop Linux and Mac users, Microsofts market share will drop a few percent, thats about it. Their development applications (excluding Visual Web Developer and Expression Web) remain high standard and MS Office - particularly Word, PowerPoint and Excel are standard in any learning place, business or home, as is Windows in general.
Sure google is trying. But Microsoft is fighting back trying to take a bigger slice of the pie out of the server market which is still predominantly Linux. Their Windows 2008 edition with support for php fastcgi is aimed at Apache directly. It is an interesting thing to see though, Google trying to encroach on Microsoft market and vice versa. Who is the winner is still yet to be determined for a long time.