Carleen Hawn makes some interesting points on why Microsoft’s record of innovation is so “lackluster”:

Not to mince words, Bill Gates’s researchers have placed a bunch of expensive bets on technologies that haven’t panned out. But the company’s failure also points to three much bigger lessons about innovation.
Defense is easier. And for now, it’s more profitable. Harvard Business School’s Clayton Christensen coined the expression the “innovator’s dilemma” to describe what happens when entrenched companies confront new technologies. Good managers instinctively direct people and investment toward “sustaining innovations” that protect established businesses — and away from new ideas that threaten current profitability. That’s why Microsoft spends a lot on Office and Windows.

We have some local examples of protecting established businesses: Newspapers. Despite general circulation declines, both Madison Newspapers (Capital) and the Journal Company continue to invest in niche print publications that keep the printing presses going.