Microsoft is Dead, or is it the desktop?

Paul Graham says Microsoft is Dead. Paul Thurrott says Microsoft is Dead?. Paul G will look like a fortune teller if he is correct in predicting that the last few years of Microsoft losing its' edge were the tipping point to a larger irrelevance. But Paul T. is absolutely correct in saying the beast from Redmond isn't dead yet. You simply can't discount the financial resources and the large number of very smart people there. One thing that Paul G. says which I don't agree with is:

everyone can see the desktop is over

Sure, some future version of the Web may in fact consume all applications that previously didn't run in a browser, but I don't see it happening for a long time. In my view, the Web will lag behind what is possible with an actual desktop application. We have been waiting for the WebOS (what would that even mean anyway?), or Web applications to fully replace desktop apps for a lot of years already. This is some interesting thought on why desktop email cruxifies browser based mail. Also, would Adobe be spending as much time and money as it is on Apollo if the desktop were dead? That answer seems obvious to me...