Microsoft's Biggest 2010 Missteps

Compared to the turbulent 2009 that saw Microsoft's first widespread and its earnings ever, 2010 was smooth sailing.

But anything short of death would be smooth sailing compared to 2009.

2010 was still a year of highs and lows for the software giant. The big wins were in gaming with the release of Nintendo Wii competitor Kinect, Microsoft's motion technology that sold 2.5 million units in its first month. Windows 7 adoption also remained steady, as Windows XP-weary enterprises began buying new PCs and migrating existing ones to Windows 7.

Microsoft search engine Bing continued to build momentum against Google and has since its launch a year and a half ago. Microsoft also made a commitment to cloud computing with Windows Azure, a cloud services platform for developers, and the newly rebranded Office 365, which gives businesses access to Office Web apps and cloud versions of Exchange, SharePoint and Lync for a per user, per month fee.

But even with these highlights, Microsoft slipped in some major areas in 2010. It was caught asleep at the wheel with tablet PCs (hello, iPad), got downgraded by Wall Street and re-entered the mobile phone race with a whimper with Windows Phone 7.

"You have to think a little harder for the Microsoft negatives this year," says veteran technology analyst Roger Kay. "But there were still negatives."