People don't pay for digital goods--not really. What people are really paying for when they download an ebook or a song are service and convenience. Companies like Amazon and Apple (in the form of iTunes) make their money concentrating a diverse collection of content into a single convenient and searchable portal. This spells trouble for Microsoft, who is in the business of selling Windows, because people are becoming increasingly resistant to the idea of being charged for digital goods.
A growing number of companies, notably Google and Facebook, are sharing the workload of developing the software that power their business by giving their work away for free. Much of the software that powers these companies is the same as the software that powers their competitors and companies in unrelated industries. By encouraging this free exchange of knowledge, they are able to reap the benefit of brilliant minds outside their companies from around the world. Some of them are employed by other companies to work on these cooperative projects and some do it for fun or altruism. This collaboration has allowed these companies to focus on providing unique value, charging for things that can't be downloaded or copied from computer to computer, without wasting energy on duplicated efforts.
While Linux has become a poster child for this kind of thing, BSD has been at it decades longer. In the same way that Linux has harnessed the power of cooperation to outpace Microsoft's Windows on the server, Microsoft could begin working with the rest of the world to build Windows 9 on BSD while focusing on delivering things the next generation of customers are willing to pay for. Microsoft could try harnessing the popularity and momentum of Linux to its benefit, but they would face two major obstacles. Besides risking looking like a "me too" effort, it would require the expensive task of rewriting large parts of Windows that Microsoft cannot share because they have been licensed from other companies. BSD's more lax sharing policy would allow Microsoft to share their own work while honoring their existing licensing agreements with other companies.
Apple used BSD and a lot of other shared code in creating OS X, but they have shared comparatively little of their work in return, preferring to shoulder most of the burden themselves as in decades past. While this has given them a leg up in reinvigorating their operating system, their limited participation has lessened their benefits. In order to really turn Windows around, Microsoft would have to commit to continued participation rather than dipping their toe in the water.
Another reason for adopting BSD is Windows' records for security and performance. They are like the Statue of Liberty before its renovation in the 1980s: "tarnished" would be a gross understatement. As an example, one journalist noted1 Microsoft has improved their infamous "Blue Screen of Death" in Windows 7 by automatically rebooting the computer. BSD has a long and proud history that Microsoft would do well to adopt. History has shown that BSD can be the foundation for many secure and efficient solutions.
Changing to a BSD-based operating system would be disruptive to companies that use or sell products for Windows and development on Windows 8 has already begun, so it would make more sense to target Windows 9 than to rush to make changes to Windows 8. Some tools would have to be rewritten, but there are a couple of ways that most applications could continue to work. As with "XP Mode" in Windows 7, older programs could be run by a sort of parallel copy of the older version of Windows. Another possibility would be to incorporate the WINE project. WINE does a remarkable job of running Windows programs from Linux and OS X already. With Microsoft's inside knowledge, WINE could work wonders for Windows 9 and require a lot less work for end customers to use than "XP Mode."
A leaner, stronger, nimbler Windows with a 21st century focus on service and convenience might be just what Microsoft needs to keep from drowning in it's own legacy.
(I've deliberately avoided specifics about copyright and software development here to keep my explanation concise and easy to understand.)
1 http://twitter.com/shawnp0wers/status/21266466531713024 "Wow, a Windows 7 blue screen of death. They're advanced now, it automatically rebooted afterward. :D"
