Microsoft still doesn't know what an operating system is
Its been 30-40 years and they still haven't figured out basic stuff like what an operating system is.
I reckon it all went wrong for them because their model of a machine is a PC -- their idea of a 'user' is a human banging away on a keyboard (or equivalent). Their idea of 'features' is how appealing the UI looks considering the fashions of the day. This model served to make them a lot of money but its always been an architectural dead end. Unfortunately since you can't mess with success their idea of extending it is merely to rehash the old terminal / mainframe concept by dressing it up with all the latest buzzwords -- 'clouds', 'IoT' and what have you. Its still as old as the hills, underneath all the fluff and hype you're just buying time on their system.
(I'm just a grumpy old git, one who works with embedded systems (but is supposed to be retired). I find Microsoft frustrating because like many I'm forced to use in the workplace. Every time I interact with the Windows desktop its gained features that I neither want nor need and loses capabilities I need to actually get work done (typically MS has messed up ports -- they still can't make USB work properly -- and IT has decided in the name of security' to disable a few more things). Linux is so easy.....)