Microsoft is threatened. Selling Office (and Windows) licenses is the backbone of Microsoft and that's what's financing all the other adventures. Large companies have to buy Office licenses for every workstation. Even with large customer discount they still pay millions on license fees. With LibreOffice now being independent of a large company it becomes a viable alternative for those large corporations. It's much cheaper to hire a LibreOffice developer or get a company like SuSE for contract work on it to do all the required customizations than buying MSOffice licenses.

People complain a lot about the GUI of LibreOffice. But in fact it can be an advantage because it is much closer to Office 2003 than the new Office versions. And it seems that Office 2003 is still the de-facto standard in a lot of corporations. So moving to LibreOffice might in fact require less training than new versions of Microsoft Office.

There are other alternatives like Google Docs etc.

Therefore it is a threat to Microsoft. Will LibreOffice/Google Docs etc. kill MSOffice in the next Years/Month/Hours? Of course not. But it will have an impact on Office sales and MS would be stupid not to consider it a threat.

And of course there are still some technical issues. E.g. a missing alternative to MS Exchange. I know that there are some commercial open source alternatives. But there is not the one true alternative on the horizon. Another problem of course is backward compatibility, SharePoint, etc. But all of that can be fixed in the long run and will be with more support from companies like Intel.