Why does Windows still exist ?
You forgot the most important factor: It works without any hassle or effort for normal everyday consumer tasks. Go to a discount store, or to a computer store, buy a computer, take it home. If it has Windows or Mac OS installed, it will immediately work, without any installation hassles, and with minimal setup that you are guided through. If it is a laptop (and nearly all computers are today), you can close the lid, put it in your bag, take it to work, open the lid, and it will work again. It might prompt you for what wireless network to use, and to enter the password. We all argue here how to get suspend to even work on FreeBSD, and setting up Wireless on Debian is a nasty difficult task (BTDT), while on Windows and MacOS one simply takes these things for granted.
Need a web browser? Click on it. If it has a CD or DVD drive and you want to watch something: stick it in, it works. Want to look at pictures from the digital camera? Take the SD card (CF card, ...) out of the camera, plug it into the laptop (probably with a little USB adaptor), and you have the pictures. And both Microsoft and Apple will make it easy to upload the pictures to your cloud account.
Need to work on office documents, in a fashion that's 100% compatible with the software that has 95% market share? Pay about $100 (plus or minus), wait for the download to finish, and you have MS Office installed. Done. Again, minimal hassle.
In a nutshell, the reason Windows and MacOS dominate consumer computers (and I count myself as a "consumer" when it comes to the machine that is currently sitting on my lap): they are easy to use, all the way through the lifecycle starting with buying the device in the store.
3] Windows is just a vector for applications. Non-programmers, don't buy a computer for Windows, they buy it for Word, to (e.g.) type there their Master thesis.
And Word (and Excel and Powerpoint) are not the only issue here. At least for MS Office, you have the choice between Windows and MacOS. If you are into serious diagrams, Visio is the undisputed market leader, and that forces you into running Windows. And many minor applications only exists in Windows version, for example, the software required to configure and manage PCS UPB light switches (a successor technology to X-10), or the software configuration utility for Omaga Engineering industrial controllers. When it comes to unusual and rare engineering and scientific applications (typically very expensive), all software is available for Windows, about a third or half is available for the Mac, and a very small fraction is available for Linux, and I have yet to see FreeBSD specific ports. This is the reality of having to use specific software.
Now, if all you want to do is browse the web, write office-style documents (ignoring 100% compatibility with Word/Excel/Powerpoint format), and not run outside software, then this argument doesn't apply.
5] Microsoft is very good at placing its software to Engineering faculties.
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5.1] Microsoft is very good at "convincing" governments. Take for example [BGCOLOR=transparent]the "European Computer Driving License" ![/BGCOLOR]
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[BGCOLOR=transparent]Microsoft doesn't have to do any convincing or placing. The fact that it has about 90% market share on the desktop does all the convincing automatically.[/BGCOLOR]
[BGCOLOR=transparent]The problem with the proposal that Linux (or FOSS in general) could achieve world domination on the desktop is: In order to achieve world domination, you have to first achieve world domination. Microsoft got there first, and the feedback mechanism that rewards the market leader makes sure it remains in the dominating position. Apple managed to carve out a small niche, through a combination of unbelievably good engineering and relentless effort to put out the best product, and a small but fierce community of fan-boy consumers, and the admission that its niche is and remains small (and profitable). Mac OS is not after world domination, they aren't stupid enough to try. On the desktop, nobody else has a chance for the foreseeable future.[/BGCOLOR]
[BGCOLOR=transparent]In Microsoft world everybody can be changed with somebody else, there are not sh/csh/bash/ksh scripts nor complex configuration files, to configure their servers you just need to know where to click.[/BGCOLOR]
[ok, here I am boldly oversimplifying, I hardly spent more than 3 hours of my life configuring Windows servers, so actually i don't know if this is true]
While it is true that administering individual computers and small workgroups using Microsoft products is much easier, by the time you get to large installations that becomes untrue. For example, I've heard horror stories about setting up Active Directory and integrating it with a corporate LDAP.