I have never been one to count Microsoft out of the game, so it will be interesting to see if Microsoft can figure out how to actually write a web app. (Keep in mind these are the guys who can’t do cross-browser worth a damn and somehow manage to break all the MSDN url’s every couple years)
I think this will actually turn out good for lots of people, just not Microsoft. Next time I have to convince someone they should use the web instead of a “smart” client I have one more argument in my bag of tricks. This helps to legitimize the all-web approach with people who are Microsoft faithful. (Its a small jump from going all-web to signing up for salesforce.com)
But like I said, I don’t count them out. They could turn a corner and finally figure out how to do the web, I have to say it would be nice.