Awesome post. Indeed, EyeToy was revolutionary. Natal is basically a "me too" product. Amazing how many people are blinded by the hype.

I have to disagree for the most part. What do you expect MS to be? The internet grew so fast and became bigger and bigger that it was just too much to handle for one single company. Do you expect MS to own the internet all by themselves?

A lot of .com companies came up with more than 100k employees combined. Think about google, ebay, amazon, yahoo etc. All of them appeared in a very short timeframe. You can't expect one comapny to expand on all these markets equally while keep on running your own business.

I think MS is doing pretty well on the web.

Their browser is still the no.1 browser in the world,
their Messenger (Windows Live) is one of the most used instant messenger or maybe even the most used instant messenger in the world.
their search engine is currently the no. 3 in the world and gained market every month since launch.
Xbox Live is growing very fast, 23 million members and growing (probably 14 of them paying $50 a year!)
there is no other company that handles so many email accounts in the world (hotmail etc).

Despite that, MS is still a software company. They have two hardware products on the market. One is the Zune and one is the Xbox 360. One of the two is a great success.

MS has a lot of things going on like surface or courier that look simply fantastic, but the market is just not ready for this. I think it was pretty smart to let HP develop the slate and to create the software. Maybe this turns out to be the right way after a lot of people realise that people are not interested in tablets who knows.

To post an editorial about how a company that can post $6.7 bln in profit in one quarter, and have a market share of 80% of the the OS market is riddiculous. Sure, M$ isn't as agile and flexible as others, but please...spare me. If M$ did some of the things Apple did, people would scream as to how M$ only copies others...but when Apple does it...it's innovative...lol.

The gist of the interview was not about gaining or keeping marketshare, nor about just how financially successful their products are. It was about being creative and spearheading innovation.

(Innovation is not necessarily revolutionary. Sometimes it just means doing less, doing it better, packaging it well. See Google versus previous search engines, or Apple with iPod and iPhone.)

Their browser is still the most used browser in the world. Its usage share keeps declining, though, and every innovation in the browser world (tabs, heavy leverage of extensions, multi-process architecture, fast Javascript VMs enabling complex web apps, adoption of emerging standards) came from the competition.

Their OS is still the most used desktop OS in the world, and yet when I used Vista and Windows 7 I found they have been following where Apple (and Next) opened new paths in UI (composite manager display, dock, etc). As OSs become more and more of a commodity on different devices they'll have to rely on unique benefits if they want to keep asking for a premium price, though.

Do we want to talk about Bing vs Google, .Net vs Java, Azure vs Google Docs, Zune vs iPod/iPad, or WinMobile 7 vs iPhone OS-X/Android?

Strictly from a creative standpoint the sensation is that they are reluctant or unable to push the envelope in a commercially viable way, and too often they just follow suit despite the incredible resources they can muster.

They have great R&D projects - I read about them all the time - but it seems like they're smothered by the bulk of the company. Compare this with, say, Apple where you know they're constantly trying to finalize their research project into viable, attractive products.

He (that Dick guy) seemed to have some points.The reasons also made some points,however they didnt reallly respond well (in my opinion) to the clear type thing.

Dick has some points, but look at Google...they get 70-80% of their revenue and profits from SEARCH...Looking at Apple...they basically struck gold with the Ipod family, as it has spun off the Touch, IPhone and Ipad...and that's the bulk of their growth. I definitely think M$ needs to take some of those ideas from R&D to market...and we will see how Natal turns out.

I would just like to say that MS came up with AJAX.

Azure should be compared to Amazon's cloud service not Google Docs.  If you were to compare to Google, Google App Engine would be better.

But other than that, you are correct.  MS is a slow turning giant.

M$ is a very profitable slow turning giant...

That is where I disagree. You can't expect MS to push this industry alone. This looks like you blame MS for the innovations others made. This is a huge industry and everybody contributes. Do you expect MS to be the number one in every freaking segment in this industry?

At CES MS partners showed tablets galore in all sorts of interesting form factors. A week later Apple shows a rather inferior iPad. Apple gets the good press for the most part.

Apple has never had to deal with the backwards compatibility issues that MS has. A friend of ours runs IT for a large news organization where we live. We were having dinner and her husband said why cant MS create PCs like Apple can. We started talking about the compatibility issues and she brought up how they have to keep alive old Mac's because Apple doesnt worry about backwards compatibility and they cant replace/rebuild the software for this Macs at this time or anywhere near soon.

It also amazes me how Apple gets away with closed systems and are thought of as darlings. My town opened a new fitness center last month. All of the cardio equipment have video screens. This is cool. You can bring an iPod in and plug it into the equipment and watch your own content. This is cool. Connection is proprietary iPod connector. This isnt cool. Then you realize why the iPod controls the market. It is that connector. All the accessories are built for that connector. Cars now have iPod connectors. The list goes on. That is hardware lock in to a level MS never approached.