Have you noticed the change in Microsoft's messaging recently? There have been several article similar to this one:
http://blogs.technet.com/b/microsoft_blog/archive/2010/06/25/microsoft-by-the-numbers.aspx
They all have the same tone. "We make more $ than x so it doesn't matter if x is getting good press."
I'm not predicting the end of Microsoft because with that much cash and a monopoly position in desktop operating systems they will be around for a long time to come. What I am predicting is that Microsoft has now officially become IBM. When Microsoft was young they vowed to fight against 'Big Blue' and their corporate values of profits over innovation.
The press from Microsoft recently is not about how happy their customers are, how innovative their products are or how they've driven prices down for consumers like Walmart proclaims. Instead, the press is self serving and arrogant. It appears that the posting of major financial numbers is aimed more at keeping employees from jumping ship to Google, Apple or their own web startups.
Yet, Microsoft's stock is flat. As flat as it has been since Gates handed the helm over to Ballmer. With record financial numbers you'd expect Wall Street to boost stock prices every quarter. Why isn't that happening?
I suspect that analysts on Wall Street see the same thing that I do. Microsoft isn't exciting to developers. Developers were the driving focus for Gates and despite Ballmer's 'Developers, Developers, Developers' chant he doesn't back it up with actions. Without developer support Microsoft will wither into a corporate safe option and eventually transition from a software company to a services company like IBM.
The sad part is that Microsoft has really smart people and has a really great development stack with .NET. I love working with .NET but the pressure from SPLA licensing for Windows Server products, increased partner program requirements and lack of web innovation is forcing me to consider alternatives.
To me, it looks like they've run their course. They have the monopoly and there is no where else to grow without squeezing every nickle and dime out of their customers and developers. They aren't executing in Mobile, they aren't innovating on the web and desktops are going to become a smaller market faster than many people think. Unless Ballmer retires and a software guy (Maybe Ray Ozzie) steps up to steer things in the right direction, Microsoft will soon be 'Big Blue 2.'