Microsoft is, in no way, a monopoly in any of those. The PocketPC platform is still behind Palm (and gaining, yes, I know, but that's due to Compaq's iPAQ, and Palm's poor business plans). Microsoft won't be a monopoly in the Video Game Console market... that's pretty obvious. The XBox looks great, but it's a tough market to be in, and Nintendo et al have game titles that fans are rabid over. We'll never see a Legend Of Zelda on XBox, thus people are going to buy a GameCube...

Microsoft isn't a monopoly in Hardware. It makes keyboards. It makes mice. It makes that weird looking little headset... but it's not a monopoly.

Those are all markets where Microsoft can, and probably will grow, but not by leveraging a monopoly in the OS market. Consumers will simply not buy things if they don't want to... that's what causes (or rather, discourages) growth.

Aside from that, I don't think Microsoft is moving from software to services because they need a new revenue stream. If you can't see that software-as-a-service is where the we're all heading, then you need to take off your peril-sensitive shades, man. Microsoft isn't the only company with this vision. Sun has a comparable (I use the term loosely...) technology that uses Java... (hmm... another company using proprietary technology to make it work. Odd... ) Novell thought about it, and so did a bunch of other companies that I can't even think of right now.