Microsoft sees their software as products to be sold or rented to enhance their business revenue stream. Businesses (especially smaller ones) see the software products simply as tools to accomplish work. I've yet to find a business customer that has any love for "software" per se. Typically, they roll over their computers and the software on them when (and if) the tools' obsolescence renders them inefficient. As PX Eliezer70
have noted, a lot of software tools remain highly functional even to the end of the mechanical life of the computers they're installed on. Among my systems are a Win98 and a WinXP system that are both still running Office 98, and performing their intended tasks quite effectively. The main problem that is encountered in such older-software usage is Microsoft's feature-creep that at times interferes with using the older tools (such as .docx implementations of incoming Word files)... but even then, there are ways around most such things (viewers, translators, etc).
From my perspective, the largest issue facing Microsoft's attempts to encourage migration to a subscription model with more frequent, but smaller, version updating is the impact that will have on businesses who will face a continual flow of changes to their tools. Security updates are one thing for a business to deploy and absorb across their fleets of systems... version updates may be quite another, especially if they impact how things are actually done in the use of the tools. What matters most here is perception: will businesses be willing to incur the usage perturbation uncertainties of continual version updating, regardless of licensing cost advantages or penalties? Currently they're willing (but not happy) to eat the costs of rolling over their tools every so many years... that would no longer be the case with more frequent version updates, and I strongly suspect their "unhappiness" will increase accordingly.
If one thus alienates their business customers and likewise alienates their home customers, what will they have left for their primary markets? Certainly the markets won't simply evaporate... the customers in both sectors have few cost-effective alternatives to just going with the flow, at least to some extent. But things like this do affect how alternatives are perceived... and raises the odds of some upstart company appearing on the horizon to eventually eat Microsoft's lunch.--
The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money. A. de Tocqueville