Fortune has taken a rather bizarre approach to answering this question: asking folk who actually might know.
A chat with a few ex-employees (some disgruntled, some not) reveals a raft of answers which aren't really that surprising.
The worrying part was that the notion that there wasn't really much anyone can do about it.
Maybe that's the most damning criticism offered by those who've devoted much of their work life to Microsoft: it is so unwieldy and complex a beast that even some of those who spent an hour or more telling me everything that's wrong with the company concede that, short of breaking it into two or more parts, the board has no choice but to stick with Ballmer and hope he can harness the company's considerable talents and turn things around
Well worth reading, along with another article from 'Bash Microsoft March' which has a few interesting comments from the ill-fated Courier team.
One thing worth bearing in mind is that Microsoft is still a profit power house, and while they may be failing in the mobile space, their server and services division is going from strength to strength. As I've said before, MS is not going anywhere; it's just settling into an IBM-type retirement: high end business solutions and consultancy.