When Windows has a real rival, Microsoft has real problems.
As Blodget notes, there are caveats: The unofficial Office monopoly should give Microsoft breathing room for a few more years. But even that could be threatened as Google's more-affordable Web applications improve.
This storm has been gathering for years. In 2005, we wrote a piece at News.com about Google's longterm threat to Microsoft. The impetus was a major management shuffle at MSN, but we had fun pulling out some old Microsoft memos about now-defunct Netscape in the early days of the World Wide Web. My favorite was a note written in 1995 by Microsoft engineer Ben Slivka describing a "nightmare" scenario for his company.
"The Web...exists today as a collection of technologies that deliver some interesting solutions today, and will grow rapidly in the coming years into a full-fledged platform (underlined for emphasis in the original memo) that will rival--and even surpass--Microsoft's Windows," Slivka wrote.
Microsoft didn't pay too much attention to the warning. Ten years later, another internal memo put a name to that nightmare--Google. Now Blodget has advanced that nightmare scenario a few more steps with his analysis.