There's a long tech history of companies making record profits just before they go out of business.

It happens when they hone their product during the adolescence of a disruptive innovation. Microsoft is staring down the twin barrels of linux and SaaS. Its products have pretty much maxed out their potential (read: they've run out of runway), but are neither free nor services. It's a different game. [edit also, wine works amazingly well]

Meanwhile, Apple heads the disruptive innovation of iPods. They'll need another disruption soon though. Tech demands it.

Microsoft's SaaS approach is compelling even if it is late in getting to market.

Want hosted email? They'll host it and it is guaranteed to be 100% compatible with Outlook/Exchange because it is Exchange. Want hosted groupware, etc.? They'll host it. Change your mind and want to host it yourself? Okay, they'll sell you the same software that the hosted solution is running on, to run on your own hardware. I bet they will eventually even help you migrate it onto hardware that you can purchase from them, so that you have nothing to set up.

In contrast, none of their competitors have 100% Exchange compatibility because they are not running Exchange. Very few of their competitors let you change your mind and painlessly switch from cloud-hosted to self-hosted and back as you see fit. And, most of their competitors don't have any solution for hybrid systems where self-hosted applications and data are automatically replicated onto the cloud, or where the cloud can be used to incrementally add capacity for applications you are currently hosting yourself.

Wine might work well but it doesn't matter, because only people who don't have any money will use it. Microsoft traditionally doesn't compete for customers that don't have any money, and I think that is a smart approach. They cash checks while everybody else prays that people will click their tiny classified ads. When they release Internet Explorer 9 with Adblocker their competitors' revenue will go to zero.