their main problem is being late to the party imo. Windows 8, Phone 8 and the Surface Pro are pretty excellent. We are seeing the first generation of proper laptop/tablet hybrids that could really change the way we see computing. Those products might not come from MS directly, eg. Thinkpad Helix, but they enabled it and i think its awesome to be able to choose from hundreds of different devices.
Innovation is not just about being different, its about being different successfully.
I give credit to MSFT for ... finally, after 2 decades... trying to innovate. I don't think they will be successful with these products, but possibly they can iterate on them until they are successful.
This is a lot more than google has done, and you're right, people should make the comparison to 1990s Microsoft which used FUD to kill innovation in the industry.
Fortunately, Balmer seems to have killed that ability in 2007 when he said there was no chance the iPhone would be successful.
Maybe MSFT has turned a corner. And unlike google and everyone else, they actually have a license from Apple to use multi-touch, etc, so they're actually legitimate competitors.
