With the 2011 Consumer Electronics Show (CES) now in the rearview mirror, the gadget blogs and tech industry cognoscenti are already scrambling to hype The Next Big Thing (tm)—an expected announcement about Apple's iPhone coming to the superior Verizon wireless network. And thank goodness, because it's time for a rational discussion about what really happened with Microsoft last week.

Related: For Microsoft, 2011 to Be Year of the Tablet ... Again

On Wednesday, Microsoft held a special briefing about its plans to port its mainstream Windows versions—and not some other product that uses the Windows brand—to non-x86-type hardware. More specifically, Microsoft will port Windows on "system on a chip" (SOC) hardware that will enable Microsoft's flagship product to run on devices as small as a tiny portable handset.

Wednesday evening, at its annual CES keynote address, the company then barely mentioned the initiative, and CEO Steve Ballmer specifically ignored the most prominent market for such hardware—iPad-like tablet devices—until the closing remarks of his speech.

When you recall that Ballmer had spent much of the previous year's CES keynote emphasizing a coming generation of tablet computers that still has yet to materialize, this new tactic suggests that Ballmer and Microsoft are either crazy or crazy like a fox.

Opinions differ.

As Microsoft's curiously short and devoid-of-true-surprises keynote ended Wednesday night, I did something I rarely do for live events: I sat on it. Rather than voice disappointment over Microsoft's inability to excite, I simply waited until the next morning, giving myself time to run over what I had heard. I then scoured the speech transcript looking for details I might have missed during the live broadcast. What I found was an admittedly long list of milestones and achievements (which I noted in my news story about the keynote the next day) and several mentions of new products and product features that would all ship over the next few months—nothing dramatic, but far from the claims that Microsoft had announced "nothing."

My take on the keynote was that Microsoft asserted a sense of confidence at a time when many of its closest advocates, followers, and allies were emitting an ever-increasing sense of alarm over the software giant's diminishing leadership role in the tech industry. But, over time, I'm beginning to wonder if the naysayers have a point.

With regards to the Windows SOC announcement, it's hard to underscore how little was really said. And it's worse than you might realize. In addition to the obvious—this move means that Microsoft's iPad response is still gestating deep inside some Redmond research lab—I'd point out that porting Windows to another hardware platform shouldn't be all that difficult. In fact, Windows was designed expressly for that purpose, though it's been a while since Microsoft has exercised this particular muscle: Modern versions of Windows are based on an NT core than was, itself, originally multi-platform, as it ran on x86, PowerPC, MIPS, and eventually the Digital Alpha chipsets.

(I don't mean to de-emphasize the amount of work that will go into making an x86-based OS, drivers, and application software running on ARM-type systems. But if this thing is wildly successful from a technical standpoint, what we'll get on the other side is simply Windows. It won't seem particularly revolutionary to actual users.)

This announcement also raises a number of questions that Microsoft isn't interested in answering at all. And again, I'm not talking about what this means for Microsoft's iPad response, which is absolutely a question Microsoft needs to answer. Instead, I'm looking at Microsoft's curiously humongous stable of embedded OSs, some of which are already based on mainstream Windows, and some of which aren't. What does this new strategy mean for those OSs?

And what about Windows Phone? Although many people—myself included—have pointed out that Microsoft's innovative new smartphone platform would be ideal for tablet-type hardware, Ballmer and company show absolutely no interest in that. In fact, in a Q&A last week, Ballmer said that the future was mainstream Windows, running on a variety of devices, including smartphones, tablets, set-top boxes, traditional PCs, and servers. If you're a Windows Phone advocate, as I am, that has to give you pause. If you're a potential Windows Phone customer, in fact, it should make you question the future of this platform beyond your two-year wireless network commitment. This isn't the way to inspire confidence in your customers. When was the last time you saw a CEO de-emphasize a just-released product for one that was two or three years away from fruition?

What this is, really, is a furthering of Microsoft's internally stated mantra, "Windows everywhere." Those in the know will recall that this actually started as "NT everywhere," but as Microsoft melded that technology into its one core product, the phrase changed a bit. How long has "Windows everywhere" been around? Windows NT Magazine founder Mark Smith wrote about it in 1998:

"Literally, this statement means Microsoft wants a version of Windows (i.e., Windows NT, Windows 98, Windows 95, Windows CE) to be everywhere an operating system (OS) can be," Smith wrote. "All that matters is the vision of "Windows everywhere.'"

So here we are, over 12 years later, and what has changed at Microsoft? Not much, apparently.

There are some differences between 2011 and 1998, however. This time, Microsoft has options, and can use other products—notably Windows Phone and even Windows CE versions that already run on SOC—instead of the one core product that refuses to die. But it won't, and this decision highlights a tunnel-vision complex at the top of Microsoft's ever-growing and insular executive chain. That is, the inability to change with the times comes straight from the top, and from those who stand to lose the most if some product other than Windows is used anywhere in the company. One wonders when the Xbox will pick up Windows branding.

What's curious is that Windows has already failed again and again when moved beyond the comfortable confines of the traditional PC (and server) world. After spending a decade pushing Windows on tablets—first through Windows XP Tablet PC Edition, and in the living room, first through Windows XP Media Center Edition—the percentage of people who actually use modern versions of those products is tiny. I'm guessing few of you even remember the Ultra-Mobile PC platform, which was yet another attempt to bring Windows to ultra-mobile devices years before the iPad even shipped; no one bought them. Designed for PC desktops, Windows is ill-suited for these new usage scenarios, and consumers have acknowledged that by staying away in droves.

This year, dozens of companies will ship Windows 7-based tablets and they will all fail. Instead, consumers will continue buying iPads, and they will buy Android-based tablets (and, possibly, the RIM PlayBook), because those products, unlike Windows tablets, have been created specifically for that market.

But Microsoft will push ahead with Windows regardless—damn logic and the increasingly pleading requests of its users—and we'll arrive at a point a few years from now when you can purchase this over-extended system on ever-tinier devices and perform such foolish acts as run Microsoft Office on a wristwatch-sized system. Sure, there will be UI concessions to the form factors, and Microsoft will once again overburden Windows with new interface paradigms that no one cares about. This is a company that doesn't learn from the mistakes of the past or grasp that Windows is not a nail it can simply hammer into any product or market.

One thing no one can argue about, however, is that Microsoft's response to the iPad threat is as plodding and slow-moving as anything else the software giant does. Although the work to port mainstream Windows to SOC has been going on for years, Microsoft Vice President Steven Sinofsky, who heads the company's Windows division, said last week that it would take Microsoft "two or three years" to bring this new platform to market.

I have to ask: If you perform an impressive engineering feat and no one buys the resulting product, is it still an impressive engineering feat? More to the point, is Microsoft about doing something because it can be done, or does it do what its customers need and want? If the answer is the former, please, do keep talking vaguely about engineering and do keep pushing Windows to every technological nook and cranny you can find. But understand, too, that when you wake from this engineering stupor, much of the world will have moved on to other companies and products.

There's only one way this story ends, unless Microsoft wakes up. Please, give us a sign!

Learn more: Ultrabook PCs and Tablets Dominate 2012 CES News Cycle (January 2012) and Steve Ballmer Makes a Surprise Appearance at CES Keynote (January 2013).