Lots of doom and gloom coming from Redmond. First, this (long) piece by Charlie Demerjian on SemiAccurate:

Microsoft is largely irrelevant to computing of late, the only markets they still play in are evaporating with stunning rapidity. Their long history of circling the wagons tighter and tighter works decently as long as there is not a credible alternative, and that strategy has been the entirety of the Microsoft playbook for so long that there is nothing else now. It works, and as the walls grow higher, customer enmity builds while the value of an alternative grows. This cycle repeats as long as there is no alternative. If there is, everything unravels with frightening rapidity.

Demerjian makes damning points that almost seem hyperbolic, until you read about this Black Friday experiment conducted by analyst Gene Munster, as reported by Philip Elmer-DeWitt for CNN:

Shoppers at the Apple Store bought an average of 11 iPads per hour. Despite heavy TV, print and billboard advertising for the new Microsoft Surface tablet, not one was sold sold during the two hours Piper Jaffray spent monitoring that store. Doesn't bode well for Microsoft's answer to the iPad.

No, it doesn't. Even worse, this from Paul Thurrott, creator of the Supersite for Windows, in regards to the long-delayed Windows Phone 7.8, the only thing abandoned Windows Phone 7 adopters had to look forward to:

Microsoft, silence is no way to treat early adopters, the people who are your most loyal customers. It is the most disrespectful thing you can do, in fact. Combined with the weird and continued holes in your ecosystem strategy—the inability to get Xbox Video content on Windows Phone 8 as only one obvious example—it’s unclear to me why you think anyone should support you or your mobile platform.

Microsoft, if your biggest fan and advocate can't support you, then who can?

Despite all of this, I'm not ready to count Microsoft out yet. Most of this isn't exactly new for Microsoft. Every other version of Windows has always been terrible. Most of their products flop. The fact is, they still have a lot of money in the bank, and none of their competitors are ready to adequately take their place in the enterprise. Yet.

So while I don't think they're doomed, I think they've made some grave errors that they need to fix fast.

Pissing Off Early Adopters

When Windows Phone 8 was announced, Microsoft said that Windows Phone 7 adopters were out of luck, even owners of the flagship Nokia Lumia 900. Does Microsoft think that screwing over early adopters is going to build the brand loyalty it needs to take on Apple and Google?

Pissing Off Partners

Microsoft angered their PC hardware partners with the announcement of their own Surface tablet. Even worse, it's not a good product. Now Microsoft is stuck with a lousy tablet and OEMs hesitant to keep doing business with them. It's the proverbial rock and hard place.

Cramming Modern UI Down Our Throats

Modern UI, the tile-based, touch-optimized overlay, has completely replaced the Start Menu in Windows 8. In fact, Microsoft went out of their way to remove all traces of it from the operating system.

Compare that with Launchpad in Lion. Like Modern, users love it or hate it. But the difference is, if you don't like Launchpad, you aren't forced to use it. You can still launch apps from the Dock, Spotlight, or even the Finder if you want. In fact, if you hate Launchpad, you can pretend it never existed.

But Microsoft doesn't give you that choice. Miss the Start Menu? Tough. Hate Modern? Get used to it. Don't have a touch-enabled PC? Might wanna go buy one.

Not a great way to keep veteran users on board.

Ecosystem Incompatibility

As Paul Thurrott points out above, you can't play Xbox video on a Windows Phone. Windows Phone 7 is incompatible with Windows Phone 8. Windows Phone apps won't work on a Surface tablet with Windows 8 RT, nor will traditional Windows apps. However, traditional Windows apps will work with the Surface tablet with Windows 8 Pro. Got it?

The Xbox, Windows Phone, and now Windows 8 all sport an identical interface. From an end-user's perspective, they should all logically work together, but they don't. Microsoft's attempt at a unified interface just causes more confusion.

Apple's ecosystem has incompatibilities, but at least they make sense. If I buy iTunes media on one device, it works on all of them. iPhone apps always work on the iPad, and iOS apps never work on Mac, nor vice versa. Meanwhile, Microsoft has a phone OS, tablet OS, desktop OS, and a game console that are almost completely segregated in every way except appearance.

Can these problems be fixed? Yes. Will they? I doubt they will be with Ballmer on board. He's too stubborn and too arrogant to affect real change. Unfortunately, the two men at Microsoft who had real vision and could have made a difference, J Allard and Steven Sinofsky, are now gone. The Microsoft of today is crippled by a crazed monkey, who has the full backing of the founder.