Paul Graham writes in an essay entitled “Microsoft is Dead’:
What killed them? Four things, I think, all of them occurring simultaneously in the mid 2000s.
The most obvious is Google. There can only be one big man in town, and they’re clearly it. Google is the most dangerous company now by far, in both the good and bad senses of the word. Microsoft can at best limp along afterward.
[Ajax] was the second cause of Microsoft’s death: everyone can see the desktop is over. It now seems inevitable that applications will live on the webnot just email, but everything, right up to Photoshop. Even Microsoft sees that now.
The third cause of Microsoft’s death was broadband Internet. Anyone who cares can have fast Internet access now. And the bigger the pipe to the server, the less you need the desktop.
The last nail in the coffin came, of all places, from Apple. Thanks to OS X, Apple has come back from the dead in a way that is extremely rare in technology.