Steve Ballmer announced his retirement. People cheered. Stocks grew by 8%.

Microsoft’s business model was simple so far: computer processors are getting speedier, let’s make Windows use more resources so people would buy new computers, new Windows and Office licenses. Pretty good plan. The love chain broke in 2008, because of Vista and the economic crisis, and because their main innovation was that the new Office was running better on the new Windows. People stayed with XP (37% market share) instead of upgrading to Vista (4% market share).

Sure, Microsoft was (and still is) making a lot of money off their corporate business, so they did not care much. And along came the smartphone and the tablet. People started checking their email and reading on their phone and tablet and ignored the PC. 500 million people use Facebook from their phone.

And Microsoft has no foothold in tablet or smartphone market. Their problem is that, outside making money off corporations, they have no clue what is going on. And that is not enough anymore. Their tablet sucks, their mobile OS also, and people do more and more stuff without the PC. PC shipments are down, PC usage is down.