At this point it would not fail, it may be relegated by a newer service, like IBM and Xerox gave way to Microsoft and Apple. The big old corporations are still there, but they are not what they were in the 1980s.
Or if there was a big technology shift to something they have not yet mastered they could be made irrelevant, but still exist like Kodak.
They are too big to fail unless it is by their own failure to adapt or bad financial decisions (look at Blockbuster, Borders and Polaroid).
My take on this Cloud-First-Windows vision that was leaked from a Microsoft presentation with very little details and just a lot of speculation:
If it actually happens, it will be more similar to a Chromebook, they will provide, likely an ARM based, low specs device with a basic Windows install that perhaps only has the cloud-connector (probably RDP based), One Drive to sync files, and Edge with extensions to run Office365 in offline mode.
Apps would just be either web-wrapper based apps, or RDP Apps, or you could just deploy your cloud desktop to do some work that requires more power.
I also think they would still provide an x86_64 based Windows for more powerful PCs for content creators and gamers.