It's incredible to hear stories where businesses will self immolate just to protect a cherished cash cow. Microsoft's reluctance to make many of their products free online can be seen as a special case of this. And game theory wise Google was quite sharp to start offering under-featured products such as Google docs for free online. Despite the fact that these products had only a fraction of the features of e.g. Word, they were a direct attack on Microsoft's cherished cash cow (Office), and put Microsoft in the incredibly uncomfortable position of either having to begin innovating and offering their products online at deeply discounted prices (and hurting themselves further), or just sitting still while Google's initially awful offerings became more feature rich and a more threatening competitor.

In business inertia is often death.