Interesting. It seems to me that innovation at Microsoft really is all "under the hood" stuff, and nothing up front and easy to see. What they are doing in their developer tools is simply amazing.
However, their front-facing innovation is lacking, seriously. It makes me wonder if they have a plan, or if they are simply lacking entirely. There are a lot of markets out there that they could do very well in, but aren't.
My take on it is that Google and Apple have been successful in changing their core businesses, but Microsoft has been sticking to what they know. Apple has become a retail store for other people's products, while Google has branched out their advertising into different non-profitable products that keep them in the lime-light. MS will have a long, hard road ahead if they want to stay relevant in anything other than base platforms.