This memo isn't in context. Back at this time they were in the midst of an anti-trust action. Microsoft missed the perfect opportunity. Here's what they should have done:
1) Sell the windows/dos OS to IBM. Lock, stock and barrel, they keep their apps/office. No brainer, probably could have bagged 20 Billion for that.
2) About 3-4 months later, move all the office and apps to Linux. Again, a no brainer. They also get to screw IBM again like they did with OS2. I know they had an effort to migrate their apps in 1998 in a middle eastern country that is in the news.
3) Dismiss the action against them since IBM has the crappy OS now. They get a real OS that they don't have to worry about. Linux gets a unified GUI and apps. By now Windows would be just another bad joke, like Exec 8 and MVS.
Without that OS still around, the whole world would be different today. Probably for the better.