Really doesn't ring true at all. "Windows" and "Ofiice" as natural monopolies? That's not at all the stock definition of natural monopolies. Natural monopolies classically are said to occur in markets like electric power, phone service, natural gas service, where there's an inescapable (ie not legislated or state-maintained) huge cost of entry into the market, and then each additional customer has an almost neglible marginal cost.
A "winner-take-all monopoloy"? I dunno, that smacks of network effects, a la Hal Varian. (http://www.inforules.com/models/m-net.pdf.pdf ). Do Microsoft boosters really want to go there? Because in the case of a good that's got really, really strong network effects, a little sub rosa action could go a long ways to tipping the balance one way or the other.
The Kinect is highly innovative and it the fastest selling gadget in history: http://www.neowin.net/news/kinect-beats-apple-becomes-fastes...
WP7 may have been late to the table and turn into a total failure, but it's certainly innovative.
Hell, even the Zune device + Zune software + Zune service is the best music provider out there, imho.
I guess you can argue that Windows 7, .NET 4.0 and ASP/MVC are derivative, but they're certainly moving their core products forward.
Microsoft has plenty of hits and plenty of misses, but everyone acts like they're being left behind by Google, Apple, Facebook and Twitter. They still make a ton of money and put out a lot of new, fresh products. Some are great (.NET 4, Kinect), some crappy (IE 8), and some meh (Office 2010), but would you argue Google has any better of a track record? Remember Wave and Buzz?.
