Well, that's the ball and chain right there. There was no competition for Microsoft in the 90's, so they were aloud to get away with mediocrity. The only saving grace for them is that they have such a big market share, but in terms of personal computing experience, Apple's and I guess Google's integration in all aspects of life is unquestioned, everything works together, mobile, desktop and now cloud services. They are moving forward and creating new devices and OSs.
Microsoft is a master of business machines, not personal computing. This is reflected in their overall strategy (or complete lack there of) and their integration of their products, which do not integrate into people's life seamlessly. Not only that, they have a million versions of their OS, with price differences of 100's of dollars, where as Apple has one OS (for pcs) that has everything. upgradable for $30 bucks or so from the old OS.
They don't understand how people interact with personal computers and have shown no innovation for at least the last decade.They are only playing catch up and are still a few years behind. Microsoft should stick with building OSs for business and Office and all that and let companies that understand how people interacted with each other the digital world build Personal Computers and Mobile devices that are innovative and imaginative.