The End of Microsoft?

I read an interesting article ("Microsoft Takes to Cloud to Ward Off Competition") about Microsoft today in the New York Times, and a couple of interesting things really stood out to me. The article provided an interesting overview of Microsoft's new product "Office 365", it's cloud-based response to Google's cloud software, but the article mostly emphasized how Microsoft is being outpaced by the younger technology companies like Google and Apple. So here are some things that I noticed:

1. Microsoft hasn't come out with a real groundbreaking product in a very long time. Short of its very popular gaming console XBox (and the accessory console Kinect, which is only now beginning to really gain traction) they haven't come out with something great in a long time.
• However, they have come out with some (kind of) epic failures like the Zune (alright, definitely epic failures like the Zune).
• But how much of this is just bad press? In terms of reviews, it seems the biggest pitfall of the Zune is that "it's not like an iPod"...which doesn't seem like a legitimate reason to hate the hardware to me. Some users actually prefer the Zune for its easy catgorization system and its ability to actually work with other types of OS platforms (non-Apple)
2. Microsoft seems to have its hands in too many pots- they're most famous for their office suite (which is now firmly entrenched in almost all major firms globally), but they have also dabbled in collaboration tools, email, enterprise data systems, hardware (infamous Zune and the ever popular XBox), etc.
3. They're very quiet- in terms of the media blitz that we've become accustomed to (Google released what? Apple's developing when?!) Microsoft has largely been quiet about its activities. This could be purposeful because of its epic failures (Zune, Windows Vista), but also because not a whole lot has been going on in a long time....

So what does this mean? And how can Microsoft pull itself out of a tailspin?

1. All of the products that they currently offer are very siloed (in terms of usage, almost all of their products are geared towards business people and are expected to be used in a business setting) and they all cater to a very similar demographic. I think that catering to a similar demographic is good (shows you know your customer) but make sure it's a profitable demographic. Up until now it has been, but it seems that Microsoft is moving a bit too slowly to compete with the cloud-based Googles of the world. Also, if you're going to stay siloed in a certain type of product, you need to make some decisions (see bullet 2)
2. Let's say you like being siloed. Fine-but make some decisions! Either pick a few things that you're going to be very good at (office suite) or diversify and accept that you will never make incredible margins on any single product. If you do decide to diversify across products within a demographic (business tools) make sure you offer an end to end solution (like Google's non-profit suite for non profit organizations- which it offers for free by the way- see bullet 3)
3. If you're trying to win back the public and prove that you are not a trailing dinosaur, how about pandering (just a little!) to the public? Google has been on somewhat of a media blitz recently, which seems to also play a double role in helping it cover up/overshadow all of the current investigations going on around its anti-competitive dealings. But I digress-Google's offered high-speed internet to whole cities, its home of Mountain View being only one of them and has busted into the payments game (open, collaborative platform) and has directly reached out to educators and non-profit organizations to offer crowd based tools for free! If it's one thing I know, the public really likes "free"
4. You know what happens when people like free? They use your product. I know, the logic is astounding. However, the more people who use your product, the more your product begins to settle into the mainstream consciousness. The more your product becomes the norm and the expectation of how things function (see: any product made/designed by Apple), the higher premium that people are going to pay AND you increase the conversion rate of more people moving to your product as people trend towards your company
5. Finally, be nice! I know that Microsoft was put under a lot of speculation when it first became the technology giant that it currently is because it was one of the first of its kind. However, after it became that giant in the room, it tortured its consumer with very high product/licensing costs and then decided to release (ever worse) versions of its software approximately every year. That's no way to treat customers you want to keep