As usual, Microsoft held back as new technologies surfaced (smartphones & tablets), then jumped in, assuming that anything with their name on it would overtake the early entrants. In this case, though, because of the GUI change in Win 8, they hit resistance in the PC market from both users and OEMs, and the smartphone and tablet markets were already well-entrenched with iOS & Android and saw little need for a third platform (also see: RIM). There was little innovative in Surface (Asus Transformer has had a keyboard dock for ages), the price points were relatively high, and the app portfolio for WinPhone and tablet remains thin by comparison. Gates' comments about tablet users wanting "real Office" was magical thinking at best.
Microsoft is hardly going under, but they're increasingly becoming an enterprise-only company as consumers do the bulk of their work on non-PC devices.