It is very common for big corporations to develop into business segments that compete against each other for mindshare, corporate resources etc. So, it's not surprising to hear that of Microsoft, either. It is a shame, though, because Microsoft IS in the position to change the world more than anyone else, but it seems they are now lacking the right kind of leadership that would prevent the kinds of sabotage mentioned in the OP. As for Apple, they are a big company too though nowhere near MS, but they have a CEO who is by all accounts close to a dictator. That has impacted the way things happen there, and as a result there is no (or very little) internal competition.
As for an innovative company, I think Google is one of the most interesting examples as they actually support grass-root innovation and, as a result, we have gotten some great new innovations and services.
