Consumers and corporations love Microsoft Office and it still remains the number one brand for content creation in business and education. iWork and Google Drive are starting to make inroads in this territory so Microsoft needs to act fast before it looses this key market too. Making Office available on Mobile is good first step. MS also needs to make Office as affordable as possible to students and home users who would otherwise be attracted to alternative apps that cost less.
XBox. Microsoft’s Xbox series of gaming consoles have been a big hit since the original Xbox was introduced in 2001. Instead of trying to push Windows into the tablet market with Surface they should be figuring out how to take Xbox to the mobile market with Xbox branded laptops built to play Xbox games not run the current generation of PC software. A mobile XBox could still do all the things people do with a laptop; document editing with MS Office, browsing the Web and most of all allow gamers to play their favorites anywhere.
In short, Microsoft needs to decide which of their core markets are still viable for them and which ones they need to come onboard with as partners to the companies that now dominate those markets.