I stay perpetually disgusted with MS for many things over the decades but I'm curious why you think MS could ever become irrelevant? They are so deeply ingrained in the business world that there is no rooting them out. It's been tried before in 1998 and failed and they didn't have the stranglehold that they have today.
Well the major risk I see for them is that they will lose their unique selling point.
Windows as an offline OS that can do a lot locally is going to be a perk in an online world. They're throwing that away for a lot of people and its not only a shame, it will not help them differentiate from any mobile OS sooner rather than later. And we all know, they're not going to survive as just 'a mobile OS'. They're far behind on that front, their app store is still barely a factor of importance for example, and if they move towards gatekeeping all the things you do on Windows while Apple et all are just now getting forced to open up... Its not a big step either to hook a phone to a dock and a screen and work on it. You're using cloud anyway, right. Where's Windows Phone?
I don't know I don't see the space where Windows still needs to exist at that point. It'll be more of a 'yet another cloud service' that offers a rich Office experience and whatnot. So maybe they can carve out a bit of productivity-oriented space there in the consumer market. And then what's next? The next generation of users, or the one after that, grows up
without Windows. Its already happening, except now Windows still has a chance to stand out as something special. Heck, you could probably do all of the productivity stuff just as well in any browser based app like Google Docs or something other that can often be had
for free. Windows is the only ticket MS really has to keep a strong brand presence. And what will that generation opt for when they run their business next? Its far away I admit, but their cloud business alone won't save them, I think.