One thing you address is their licensing. It's a fact that in every single small business I've worked for they only bought software to the point where it made them comfortable, which usually meant if they needed support. As you wrote, the new versions can't be copied as such, and if presented with WORKING Linux alternatives, managers will flock to them.
For example, I've used OpenOffice, you should give it a try. I found it to be quite usable as a full featured word processor. It may not be as user friendly as Office 2k, but it's a matter of evolution and time, I gather. For 95% of what I see people do with word processors (and their spreadsheet as well) you're only paying for ease of use because you don't want to take the time to learn something new.
Here's the senario:
I can set up one Linux box as a server, and run Linux Terminal Server
http://www.ltsp.org/ from it. Using it (and this is for those who don't know) I can use cheap computers without hard drives or CD roms in them to run full blown GUI desktops complete with web browsing, email and word processing. That's 90% of what most people say they want a computer for. Add a vertical application for a given business, and you've got a deal. Microsoft? Bye, bye.
The problem is, as you wrote, the vertical applications and other specialty apps. Adobe and others, for example, just indirectly announced that it will be supporting Linux.
http://software.newsforge.com/software/05/10/18/141242.shtml?tid=130&tid=138If office managers can see that they can finally run their business apps on Linux, and when faced with having to pay the full price for MS products (excuse me, $40 a pop just for a singe person to READ files off of a server??? The Internet never would have happened!!) we will have seen MS 'jump the shark'...
edited for my spelling. god bless you people who can spell.