How will Linux and FOSS give Microsoft a run for its money?

We already are. Microsoft is stuck because their entire business model is based on products. Their services are delivered through VARs and Resellers. VARs and Resellers will realize that they can deliver more functionality to their customers, but save the royalties that they would send to Microsoft, putting those profits in their pockets instead.

Customers will realize that return on investment (ROI) overrules total cost of ownership (TCO), and they will tell Microsoft that they, as customers, will not buy any more software from Microsoft unless it is "free". Then Free and Open Source Software will blossom overnight.

Can you explain what the recent new direction for Linux International (LI) is, and why it has come about?

We are turning into an end user organization.