Microsoft's a dinosaur that didn't know its dead yet. The cloud computing meteor was speeding its way, and when pervasive computing in the cloud became a reality in about 2015, Microsoft was all but dead. Why? Because the Windows and Office revenues collapsed as users finally stop buying upgrades they don't need, and cloud offerings via the browser took their place. Poof! Gone was 80 percent of Microsoft's profits. And gone was the money to invest in technologies that took multiple versions to get right -- if they ever got it right -- such as the Xbox, Zune, Microsoft Dynamics, and MSN.
Even before cloud computing finally emerged in an always-available, easily implemented, and secure form in 2014, Microsoft was seeing a long, slow drop in sales. Apple's Mac Viper OS had gained a market share of 40 percent, with all major products other than Office available for it. But the Office need was handled nicely by the 2012 edition of OpenOffice.org, which finally overcame the geeky failings of the open source app's past versions and delivered an Office equivalent that regular people and businesses could rely on. And the back-to-back Vista and Windows 7 fiascos -- which made Mac OS the new safe OS for business -- got the European Union and later the U.S. Justice Department to force Microsoft to resurrect Windows XP as a stable "basic" OS needed for businesses and government agencies to keep running.
Microsoft's own cloud attempts failed, as they required the use of Windows 7.3 and Windows Server 2012, and favored Internet Explorer over Firefox and Safari, despite the even market shares for all three. Microsoft's famous "embrace and extend" strategy failed because Microsoft could not let go of its dependence on Windows and Office revenues, which drove its decision to make its cloud offerings reliant on them as well.
Not that Microsoft hadn't thought about it, but stockholders panicked when Microsoft's second CEO since Steve Ballmer's departure in 2011 hinted that Microsoft might move quickly to cloud delivery for its key technologies -- the loss of upfront revenues would mean that Microsoft had to dig deep into its coffers to make up income that wouldn't arrive in big chunks if it went to the subscription model, and that would devastate stockholders' short-term returns. (SAP failed in the same struggle and ended up being bought by Business.com -- the renamed Salesforce.com -- while Apple had used its iPhone, MobileMe, and iTunes businesses to slowly move to a cloud-delivered services model, cushioning the impact.)
By 2017, these wrenching changes led yet another Microsoft CEO to take the "Borvell" option, radically scaling the company down to a server-and-app-dev business, following in the footsteps of once-mighty Borland Software and Novell. The Windows/Office group and Xbox groups were spun out to their own companies, with the Windows/Office group following the "constantly rearranging the deck chairs on the Titanic" path of Palm a decade earlier and the Xbox spin-off being acquired quickly by Sony. The Dynamics product line was sold to IBM, which had branched into being a cloud apps provider and wanted something beyond Lotus to offer the midmarket. MSN and the Web technologies were shut down, no match for Google, which had no interest in buying them.
Microsoft Server 2016 (which dropped the "Windows" label) had successfully kept the Linux competition to a draw and, through an alliance with Apple, integrated Mac OS Server features. This gave the "Borvell" Microsoft an advantage and helped Apple increase the reach of a server OS that never got more than 5 percent of the market despite the Mac's and iPhone's success.
Likewise, Microsoft's app dev tools kept the Java and Eclipse competition to a draw, as the developer world settled comfortably into two well-equipped, highly capable camps that allowed interoperability in the component/service model of development that became the norm in the mid-2010s.
The "Borvell" Microsoft was a sixth the size of the old Microsoft, but as a focused, smaller company, it proved to be nimbler and more respected for its technical acumen. And Microsoft could still rightfully claim a storied heritage of 40 years of proven success in its two remaining divisions, giving it the kind of respect that few "old-timer giants" -- such as Apple, IBM, and Oracle -- could claim.