A great article by Jeff Reifman has summed up what many of us in the tech industry have been seeing for the last year or two. Namely that Microsoft has lost is technological advantage because of its own size and protectionist tendencies towards its core markets. The rate of innovation comming out of Microsoft cannot even compare to that of Open Source development (in general) and internet technologies.
Any objectively minded business scholar will tell you this is not unexpected. All monopolies and almost all large corporations lessen in their ability to innovate because of corporate momentum. Its like turning a boat in the water. A small agile speedboat can turn much faster than a huge oil tanker. Small business, and businesses that must compete constantly, innovate at a much higher rate because their very survival depends on that innovation.