I think it's pretty clear, both by their successes and failures this last decade, that Microsoft has lots of internal problems. They have huge resources, you can read about amazing R&D they do every year, but they simply refuse to use it, or refuse to put their full weight behind it. With the R&D they do, and resources they have, it's very weird to see them being just reactive on many accounts, and failing to predict market and technology trends.
Their Xbox division has had a lot of innovative stuff, but they have also done a ton of mistakes or bad business decisions over the years.
I think Microsoft, as is, is mired by their own sheer size, and for every step forward they take ( Live, Xbox 360 services, Win 7, Community Games, BizSpark), they seem to take 2 steps back.
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