Schmidt is delusional!
In the 1980s Microsoft took the business market away from Apple, then it took the educational market from Apple. In the 1990s, Microsoft took the server market away from Unix (leaving only the research computing market for Linux to dominate).
In the 2000s, Microsoft took a large part of the database market from a number of now-defunct companies. It also took the netbook market away from Linux and kept the Linux desktop market share at around 1 percent and the MacOSX desktop/notebook market at around 9 percent.
In 2010, Apple started to eat into the Windows consumer notebook market with the iPad and now, in 2012, Microsoft has decided to take on Apple once again with it's own tablet.
Google's Schmidt can rant all he wants but Android has been around longer than the iPad and, as a class of devices, has not made a dent in the iPad market except at the very low end. The only reason Android got any traction in smartphones was because the first three Apple iPhones were not available anywhere in the USA except on the AT&T network.
I would not declare Microsoft dead (or even breathing hard) based upon anything Schmidt says about the company.
Always enjoy reading your column. This one had me laughing. I know Google has its hands in just about everything in the computing world. But it truly seems you hit this nail on the head with Eric Schmidt sticking his foot in his mouth.
If Microsoft weren't a real contender, particularly in light of all the points you made, why would Google be spending so much time, energy and money to overcome it? (Chrome browser, Chromebook, etc.) For a company that started as a search engine, it has certainly made headway in a lot of different areas outside of programming.
Personally, I don't think Microsoft and Google are really competing in the same marketplace anyway. Microsoft is and has for a very long time been focusing on the enterprise customer. Servers, databases and Web servers aren't something the typical home user shops for. Google may have been trying to get into the enterprise markets by advertising Gmail as an alternative to Exchange. And it has an msi package to install the Chrome browser in an enterprise. But even that is lacking real control. Does Google have anything else besides Google docs for the enterprise? (I hear from some that Google Docs is not all that. Plus, it doesn't really play nice with IE 9.)
I think it would be a nice change of pace for consumers in the enterprise and home markets if all these companies would accept that they are going to have to share our business. I may stick to my Windows box, but that doesn't mean it's my only computer and it doesn't mean I have brand loyalty.
I don't believe Microsoft or Google will outclass the other. Neither can fulfill my computing needs all on their own. They should understand that and accept it.