Well here is a problem - everyone is looking at things wrong. Linux really doesn't need to beat anything - there is no corporation backing "Linux" that stands to win or loose anything. Now there are corporations backing their version of Linux - but they are in just as much competition with other distributions of Linux as they are with Microsoft.
When we talk about Google and Android a lot is forgotten. The money I spent on my Hero did not go to Google - it went to HTC. There is no licensing fees to use Android (there might before branding but that's not the point). If I had the means to develop a piece of hardware I could grab a cup of orange juice, put on some pants, download Android 2.1 put it on my device, and sell a billion units without ever even talking to Google.
Take a look around Google's site - they don't make it easy to pay them. Gmail is free, calendar is free, contacts is free, search is free, docs, picasa, blogger, google voice, google maps, google earth, chrome, mobile sync, wave, news, reader, feed burner, and a lot more free free free FREE. So how in the heck did they rack in 21.8 billion dollars in revenue in 2008? Advertisements. So you are right Google's target market for it's profit line is business customers - business customers who want to advertise.
Lot's of business don't use Google services to run their operations, Google doesn't seem to mind. Their goal is to get those businesses to pay them money to display ads to consumers. So why should Google build a product and give it away for free in hopes that it might make a small dent in RIM and Microsofts strangle hold on business customers? Remember Google doesn't gain much from those sales - the hardware manufacture does. Most of RIM's and Microsofts customers already use Google services on their phones anyways. So what's the point?