” said Enderle, pointing to hardware companies’ vastly thinner profit margins. “It shouldn’t even be possible.” So how did Microsoft get here? The company’s biggest problem appears to be failure to recognize and execute on product ideas, particularly on the consumer side. Microsoft’s management shot down the R&D team’s efforts to push into smartphones long before the iPhone became a blockbuster. Likewise, Microsoft experimented with a pair of tablet devices -- the Windows tablet and the Origami -- years before the iPad became a revolutionary device. “Microsoft has become a clumsy, uncompetitive innovator,” Dick Brass, a vice president at Microsoft from 1997 until 2004, said in a New York Times op-ed last year. “While the company has had a truly amazing past and an enviably prosperous present, unless it regains its creative spark, it’s an open question whether it has much of a future.” Microsoft’s stock price reflects those concerns and the company’s heavy reliance on its early blockbusters: Windows and Office, which still account for a huge chunk of its profits. Shares of Microsoft have gained just 5.44% over the past five years, compared with a 43% leap for Google, a 110% rally for IBM and a 440% surge for Apple, now the tech world’s most valuable and admired company. Ballmer’s "continued presence is the biggest overhang on Microsoft's stock," Einhorn said last week at an investment conference, becoming the highest profile investor to call for his ouster.   In Defense of Ballmer While holders of Microsoft’s stock over the past decade would likely side with Einhorn, some say the blame has been misplaced. “Intel, Cisco and H-P have all basically been in the toilet since the dotcom” bubble burst, said Charles House, a senior research scholar at Stanford and a former H-P exec. Indeed, shares of Cisco Systems (CSCO) have slumped 15% over the past 10 years, Intel (INTC) is off 23% and Hewlett-Packard (HPQ) has grown just 24%. “That isn’t Ballmer. That’s the whole industry,” said House. “The whole industry got hyped during the stock boom and it has not from a Wall Street investment standpoint ever recovered.” By some metrics, Ballmer has fared better than his peers. For example, Microsoft’s 31.76% net profit margin is far better than the S&P 500’s average 9.64% and exceeds that of software makers Oracle (ORCL) and SAP (SAP) as well as Apple and H-P, the world’s largest tech company by revenue. “He’s done a great job of being able to weather the storm, unlike Oracle, which is fully entrenched in enterprise software and not even considering looking at consumers as a growth opportunity,” said Eric Chan, a management consultant for the tech industry and president of the blog Mobileslate. Solving Microsoft’s Prolonged Slump In a bid to double down on consumers, Microsoft scooped up Skype last month for $8.5 billion -- a price tag seen by many as too rich. While Skype is considered a “cool” platform that has lots of potential and is adding tons of new users every day, it actually posted a net loss of $7 million last year. “You can’t buy your way to success in the innovation game,” said House. “You’ve got to create it. It’s just desperately har