[fmw]

Microsoft offers good deals to startups[1], so cost is less of a factor than you may think. However, most people start programming as a hobby before they start a company, so it wouldn't surprise me if the cost issue mainly factors in earlier in the chain (at the point where people learn e.g. MySQL instead of MSSQL because of pricing). Of course, Microsoft is doing its utmost to push their products to students and schools, because they are well aware of this issue. Hackers, on the other hand, like to experiment, so they will come across alternatives to MS products sooner or later.

There are plenty of successful startups on the Microsoft stack. Everybody knows about the Stack Overflow story, but there are a lot more examples under the radar. Especially little ventures started by business people (who sometimes seem to prefer the Microsoft stack) that do quite well financially, but may not be very innovative on a technical level. It is just as viable in terms of getting things done and that is the only thing that matters. Admittedly, it may be harder to find good hackers with .NET experience, but the same goes for Java these days and Facebook is even successful in hiring smart people that are willing to work with PHP. Java and .NET are obviously popular with uninspired "bread programmers" because they are the path of least resistance to a safe 9-to-5 job, but that doesn't mean that all Java or .NET work is boring (consider e.g. Java at Google or Twitter).

I wouldn't want to personally depend on the likes of Microsoft or Apple for my development stack because I wouldn't bet my company on anything that isn't free as in freedom, but from my point of view as a casual observer the .NET platform is a pretty impressive piece of technology. Just like some other initiatives by Microsoft, like MSSQL things that come out of Microsft Research (e.g. Simon Peyton-Jones is employed there).

1: http://www.microsoft.com/bizspark/