TL:DR Microsoft should have broken compatibility between tablets & desktops, and kept backwards compatibility between XBoxes instead.
I was surpirsed when I first heard Microsoft were going to do a full Windows 8 tablet. I had been expecting Microsoft to follow Apple and Google by developing tablets based on an up-scaled version of their phone OS - Windows Phone 8.
This was before Windows 8 had been released. We'd seen images of the Metro interface and John Gruber of Daring Fireball was saying that Microsoft should do a Metro only Windows 8 for tablets.
At the time I disagreed. Having the full OS seemed like a no-compromise solution and another step towards a single OS across all devices.
Having now used Windows 8 tablets, I was right first time; Microsoft should have used Windows Phone 8. The first thing they should have released - a 7" ARM based Windows Phone 8 Tablet, with a stylus, optimised for OneNote - a single screen Courier.
I want to try the Windows 8 desktop on a 7" device but there's no way to use the desktop at this scale, unless you file your fingers into points, so why bother with it?
While using Windows Phone 8 on tablets would break compatibility with desktops, it has decent Office support and would have encouraged developers to try the platform, which would have boosted the phone app store.
Meanwhile Windows 8 on desktops has not gone well. I don't know if it's possible to make a desktop OS with great touch support, but they could have moved towards it in a more sensible way.
Imagine a Windows 7 desktop with both live tiles and regular icons, full-screen Metro apps but with the normal Windows 7 task bar at the bottom. Beyond the first level, the Windows 7 start button isn't great for touch, but with some tweaks it could be OK.
So, in the case of Windows tablets, Microsoft were wrong to keep compatibility.
Now, they have made the opposite mistake - they have dropped compatibility where they really, really needed it.
In 2001 Microsoft released the original XBox. At the time Microsoft were best known for office PC software, although with the addition of a 3DFX card, you could also play games other than solitaire. It took a lot of time and money for XBox to gain traction, but today the XBox 360 is more popular than Sony's PS3.
This is partly due to Sony's decision to use an unusual architecture and expensive hardware in the PS3. The fact that PS3s are unable to play PS2 games could also be a factor. (The first PS3's had a PS2 inside - they weren't really backwards compatible, they were two consoles in one). By contrast, most original XBox games could be played on the XBox 360.
Since they were first launched both XBox 360 and PS3 have added features and now as much home media centres as games console. This is why both companies invested billions of dollars to win customers.
XBOX ONE was announced this week. It will not be backwards compatible with the 360.
I have no doubt that the PS4 and it will sell well this Christmas, but imagine all 360 games worked on the ONE. Imagine if, for a few pounds, you could download hi-res tecture packs for 360 games running on the ONE.
If Microsoft had done this Sony would be out of the game. Wii U is struggling, Android doesn't have the power (yet), the Steam Box is the dark horse in this race..
Microsoft could have dominated on consoles the way did the PC market in the 90s.
I know the technology isn't trivial, but here are two examples where Microsoft got compatibility wrong - if only they had done the reverse...!