The most valuable component in a computer ...
... is the user's data.
Microsoft chose to make each new version of Word sufficiently incompatible with the last that people would be inconvenienced into buying the extra bloat. I parted company with Microsoft over a decade ago partly because I could get better software for free, but mostly so I could keep my data forever. If Microsoft had any interest in getting my custom they would have to:
1) Use open standards so data can be exchanged without everyone having to buy Microsoft software. No Silverlight. No patent half promises that will get re-worded when they have my data hostage. The free in free software guaranties freedom from lock in.
2) Distribute under the GPL. That way, I can fix problems that annoy me, and non-programmers can hire programmers to fix problems that annoy them. Without the source code, and a license to play with it, you cannot be certain there are no backdoors. Also, GPL software can be linked to the vast supply of existing GPL software so people do not have to re-invent the wheel.
3) Compete on quality. At present I am required to pay the Microsoft tax, and spend time and effort to get it back. Most people do not bother, so Microsoft still get paid no matter how bad their software.
A month ago I would have said Microsoft were still years away from being an acceptable software supplier. Now there is the first sign progress. There are rumours of a Microsoft App store. Imagine if it became a reality:
Hardware distributors earn their profit from software sales. Selling a Microsoft box means selling MS Office, antivirus, and getting a handful of cash for pre-installing crapware. They hate to sell Linux boxes because a Linux box can do plenty with free (as in beer) software, and crapware has not been ported to Linux.
Microsoft need an App store to compete with the convenience of Apple and Linux distros. When they have an App store, they remove distributors' motivation to pre-install Windows. When that happens, Microsoft will have to compete for real.