Last week I mentioned that Microsoft is in danger of becoming IBM. This got a good deal of response from the Microsoft fans on Twitter and it was of course not meant to be provocative; in fact, I was just stating the fact that the recent releases of Windows RT and Windows 8 have been less than phenomenal. IBM faced a similar situation in the early PC days when, after having been beset by clone makers who were able to sell compatible machines without the albatross of Big Blue’s substantial R&D investment, they tried to continue to compete in an already saturated and frankly lost market.

With that said, not all of Microsoft’s recent releases have been so poorly received — Windows Azure seems to be doing extremely well. In fact, their recent addition of Oracle’s software (Java included) to the Azure platform is likely to contribute to the platform’s continued growth. Also, it is important to remember that a lot of enterprises run their business on Sharepoint, Microsoft Exchange, and Windows Server.

The success of the Xbox business is debatable, since Microsoft has been loathe to break down how much that division takes to run and how much revenue it has generated for the larger company; in fact, the lack of corporate boasting suggests that any profits generated by the Xbox business are modest when compared to the company’s other divisions.

What’s not debatable is the abject failure of Windows RT. When you think about it, WinRT is a strange bird. In a lot of ways it is designed to solve a problem (battery life) that Intel has largely solved with its upcoming Haswell line of processors but makes a number of trade-offs, such as not being able to run traditional Windows software, that the market has been unwilling to accept. Given the time in which WinRT was developed and when it was released it is understandable why those concessions were made but the market was confused by the constant drum beating of “it’s just Windows” — an assertion that in reality was dubious. Worse still, the existence of WinRT has not stopped enterprises (Microsoft’s primary customers) from deploying iPad’s and Android tablets.

Windows Phone suffers from the same issues in the enterprise that WinRT does and, like WinRT, is desperate need of developer support. The install base for Windows Phone is nothing to brag about. Ironically, Windows Phone is one of the most innovative and frankly one of the best products that Microsoft has released on the consumer / client side; to clarify, we are talking about Windows Phone 8 here not Windows Phone 7 and certainly not Windows Mobile. Unfortunately, it was just too late to the market and the delay allowed iOS and Android to become entrenched.

One business Microsoft still dominates is the desktop OS business, but that has more to do with the other major players not being terribly interested in that market, consumer inertia, and of course being the standard desktop OS for enterprises. It hardly seems wise to boast about winning a race that was won decades ago; especially, when the trajectory of technology looks to be making your choice of desktop OS less and less relevant.

Looking at all of these business, there seems to be a clear pattern: Microsoft does well in enterprise and backend markets, but is increasingly weak in the consumer market. At this point, would it not make sense for them to just dump or split off the consumer side of things and focus on their competency? Imagine and Xbox company that didn’t need to worry about the priorities of the other divisions; doesn’t the recent refusal to allow self publishing by independent developers and the response given by Microsoft (which boils down to “look at Windows 8 / WinRT” first) make it look like the Xbox business is being held back for the benefit (or perceived benefit) of the Windows division? I have a sinking suspicion that if we took a look at other decisions Microsoft has made in other divisions, we’d find that a lof of sacrifices are being made to keep the Windows client (Windows 8 / WinRT) safe — Office for iPad anyone?