From a Wired article on Microsoft's emphasis on technology-based copy protection:

If the experience of the world's largest software vendor is any guide, the industry's best hope for reducing piracy rests with anti-copying technologies rather than in policing the legalistic user agreements that restrict how software can be used.

I can understand their frustration with legal recourse. For broad-based consumer applications, it's pretty tough going after individuals. Software companies have had some success working with PC makers on pre-installation issues, however.

What will happen if copy-protection tech is widely adopted? Well, there has already been significant pushback against this stuff. Also, every time one of these applications slaps on an intrusive protection scheme, it makes alternatives (particularly free, open-source alternatives) that much more attractive.

If I were Microsoft, I would be more worried about how to compete against Google and Mozilla. Those guys don't need to worry about copy protection tech or enforcement issues. Moreover, although new nifty applications crop up every day, there remain core business applications that have been remarkably steady over the years. Software that allows you to write reports (Word), do financial stuff (Excel) and make presentations (PPT) covers 90% of what you do in the office, for a lot of industries. If intrusive copy protection makes it a pain in the ass to use those applications, really good free alternatives will be right there to pick up the slack; Google is well on the way to doing this already.

And as for operating systems – Linux anyone?