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I think Microsoft's biggest problem is that it is beholden to stock holders who expect it to continue to return insane profits on billion dollar businesses segments. If an idea can't generate Billions next year they don't appear interested.
Microsoft isn't like Google or Facebook or Amazon because their most important customer base is business - and business values predictability not the latest feature. If Windows Live gets a new interface overnight, the boss says "shit" not "cool" because six of his ten employees are spending time navigating the change rather than being productive - and ten of ten are bitching about it. Try to find Google's roadmap for the next year - never mind the next three. Imagine trying to organize a large business based on Facebook's terms of use, how long would that last? Sure I'll grant that Amazon's cloud service is likely to be stable, but that's the exception - Amazon isn't rolling out lots of beta's like Google or rewriting its TOS every week like Facebook. No, Amazon is dull and boring and focused on providing stability, just like Microsoft.
Agree that enterprise software has different requirements, but Windows Live is specifically Microsoft's consumer cloud product. Sharepoint and a few other products within Microsoft are targeted at enterprise, and for those it may still make sense to be on the 3 year product cycle. However, the hosted version of the enterprise services like Sharepoint and Exchange, targeted at smaller businesses, could be a great place to experiment with new features in a way similar to Google Labs (on an opt-in basis).
(I posted this on the site, but I thought I'd say it again here)

Some of us are definitely working on #1, check out:

http://blogs.technet.com/b/next/archive/2011/01/20/dirty-wor...

tl;dr; summary - we've started a group in MS where folks can work on side projects that are totally unrelated to their job (or related, not a requirement), and we organize Hackathons to get folks working together and show off their projects to the company at events called "Science Fairs". We're also working with legal to get some of these projects released to the public.

It's definitely a struggle though, turning the battleship is not a quick or easy process.

The garage is definitely a step in the right direction. It needs to be better publicized internally. I had heard whispers of it when I was at Microsoft but it was not mainstream.