In other words, Microsoft's problem over (at least) the past decade is that they're no longer a market leader. They no longer get to dictate which way the market goes. Used to be, whatever they put out the door--Windows, Office, etc.--people snapped it up and got on board. Now? Windows 8 sparked rebellion. Their mobile operating systems have been aborted and reborn so many times users are gun shy about giving them another try (to say nothing of how ultimately saturated the smartphone market is anyway.) And now they've managed to burn up much of the goodwill they built with the Xbox division by having such a disastrous showing at E3. Again, they were left following what a superior competitor put on the table, rather than anticipating what the market would want and offering it before anyone else did.
Admittedly, that's a very hard thing to do, but you'd think a company as large as MS, with so many talented people, and with such vast resources, could do a lot better than they have. But then vision and leadership come from the top. It's what made Apple work so well for so long. As noted elsewhere, Ballmer is not and never has been a visionary. I have no doubt he's a competent manager and salesman--he might even be great at those roles--but a CEO has to offer a clear, unifying vision to motivate everyone under him, and MS' vision has been so disjoint and erratic over the past decade or more as to be no vision at all. It's become a company of "me too"-ing.