"Conquering the desktop doesn't really matter anymore. Most of the really interesting software these days runs on central servers. We access it via our PCs through the Internet or a corporate network." - Erick Schonfeld, Business 2.0
Erick couldn't be more wrong, and here is why....
what percentage of people do their word processing, presentations and other such content creation using an application on a server? very few. how many desktop users actually want that to change? very few. this is the lever by which Microsoft keeps people on their platform.
moreover, as Erick correctly notes, we access server based applications via our PCs (or handhelds, as the case may be). and what happens when the PC doesn't have software that works with that application? look at how Outlook has helped create a dominant position for Exchange, or imagine how many people would use Google's GMail if it didn't work with with most popular web browsers? it's a rather simple matter of manipulating client compatibility to make future adoption of certain server applications untenable or undesirable. as an example, climbing the slopes of Outlook compatibility is probably the #1 obstacle for groupware server projects.
until we have Free as in Freedom desktop applications in the double digits for market presentation (which in turn requires a Free Software desktop environment for continued longevity) all those applications that are built on Free as in Freedom server technologies remain at risk.
Microsoft shifted the server side choices in the 90s by leveraging their client side hegemony, and there's no reason they can't (or won't) do it again.
we need to stop the wishful thinking that the desktop is a detail and that it's ok that we've not succeeded yet. we need to make sure the Linux desktop succeeds, or else watch the Linux server phenomenon slowly crumble into dust as the years march by.