From ZDNet:
Asked by one lateral-thinking MVP whether Microsoft planned to offer applications software on Linux, Ballmer said no. "We do not anticipate offering software on Linux. Nobody pays for software on Linux."
I was thinking about this. The one area that they ought to at least consider breaking into, I think, would be the gaming market. Microsoft makes a few games, including the very popular Age of Empires and I think most Linux users *would* pay for some Linux games. The question, of course, is whether there's enough of a market to justify the effort.
I've been using Linux for years. I've paid for Distributions (Red Hat, Slackware), I've paid for applications (Applixware, VMWare, various Loki games). Linux is still searching for that Lotus 1-2-3 product that will drive desktop users into its hands. As has been noted, Linux is already a great low-mid range server platform.
People will pay for those Linux apps deemed critical to their needs. Everyday, the Linux desktop becomes more viable. The more M$ jacks up their licensing fees, the better Linux is going to look.