Maybe.
They can recover because:
- Windows 9 is on the way, and Microsoft must know just how much damage Windows 8 and RT have done to the PC market and their image. Hopefully Windows 9 will have the impact Windows 7 did back in 2009.
- Windows Phone 9 is on the way as well, and WP8.1 is now as good as Android and iOS. (in terms of features, but we are still 2 years behind on Apps). With the new rapid release schedule Microsoft is promising with WP, its clear that they don't want to be left behind ever again.
- The improvements to IE11 over IE10 and IE9 show just how committed Microsoft is to bringing an amazing browsing experience to Windows with IE. It was released back in October last year and is already almost surpassing IE8's market share.
- Sure Google Docs is big, and so is Gmail, but Outlook is closing the gap, and Office is not going anywhere any time soon.
- Microsoft is 2nd place in the cloud world (Amazon is 1st)
- Satya Nadella is a really, really good CEO. He seems to be making all the right moves.
However, they can't recover because:
- It's too late to save Windows. In 2009, Windows had almost no competition, and this is why Windows 7 grew so fast. Windows 9 will be in direct competition with Android, Chrome OS and other low-cost alternatives.
- Windows Phone is still behind iOS and Android, the app situation is horrible (and with no signs of improving). Android and iOS are just too powerful for Windows Phone to gain considerable momentum.
- Internet Explorer as a brand is so damaged by IE6 and how Microsoft used it to gain monopoly with Windows 95 / 98 / 2k, that it will become irrelevant. People prefer Chrome, because of its speed and simplicity, and many people say the only reason why IE is popular is because it comes preinstalled on Windows machines.
- Office is becoming irrelevant, because non-power users can do everything they need to do using Google Docs, Open Office or iWork. Office will continue to thrive for power users, but for how long?
- Even though Nadella is making all the right moves, Sinofsky and Ballmer have done too much damage to the ship.
I've tried to be as unbiased as possible in my comparison, but I really hope that Microsoft can rise to their former glory. Yes, they seem to have made nothing but wrong moves since 2012. But Windows 8.1 Update 2, Universal Apps and the Kinect-less Xbox One shows that they can learn from their mistakes. Windows Phone is growing in a lot of markets worldwide, and I know that it can succeed. Sure, WP is behind on apps, but if the platform becomes substantially better and easier to develop for than the competition, I think that the market share will grow.
Some say Microsoft is in Checkmate, but I think that with the right moves and the right products, they can take back the upper hand against the competition and return to their former glory. (with IE12)