It may take several years before the fate of Microsoft is finally decided, but breaking up this software superpower is not the right approach.
Splitting into smaller identical operating companies, as in the "Baby Bills" scenario, would have no benefit to corporate end-users. In fact, they would lose out, as each baby Microsoft could introduce incompatibilities in the core MS technologies.
Alternatively, Microsoft could be split into three groups. It has already established a consumer division, and recently set up a group for Windows Services (ie operating systems). Applications would benefit from not being tied to Windows and there would be no reason why the applications group could not develop versions of MS Office or Backoffice products for Linux, Solaris or even 64-bit Monterey.
Most beneficial, however, would be a concerted effort by the Seattle giant to embrace open source development. It is part way there today with the Microsoft Developers' Network. Opening up the intricacies of the Windows 2000 kernel to the open source community would undoubtedly help make this platform more reliable.