In former VP Dick Brass's stabbing assault on Microsoft, he pointed to how his tablet projects were strangled to death by competing groups inside the company. So it's interesting to see the record of infighting go back further.
First, Microsoft didn't give Brass as many engineers as he wanted - just six, instead of the 20 he wanted. (He did manage to snag two guys worked at Xerox's nigh-mythical PARC, the birthplace of the GUI that inspired the Macintosh.) Consequently, the team ran into issues like handwriting recognition that only worked half the time, and a confusing interface, according to user tests.
BusinessWeek also reported back then that Office group wanted to focus on their own applications, even though the tablet group knew having software ready to go was key. Bill Gates went for the weak compromise, an add-on pack with tablet-specific features. This seems to support Brass's allegations in the NYT op/ed that the VP of Office at the time "refused to modify the popular Office applications to work properly with the tablet". Ironically, the person who shut down Brass appears to be Steven Sinofsky, current president of Windows - the guy who turned the division around and gave us Windows 7.
But the problem now isn't that Microsoft doomed their tablet PCs to failure 7 years ago, it's that they still haven't solved their tablet problems today. [BusinessWeek]