If their hiring process are as difficult as "legend" says :), then this is probably a management problem. They might be focusing on the wrong thing, forcing people to work on products that are dead on the water.

With the r&d capabilities of Microsoft, it'd be great to see them work on something more than their stale OS or their done-to-death office products. Though, in a perverse way, it's a good thing they're not innovating. Imagine how much they could damage the tech-ecosystem with their caustic philosophy which famously spawned the "embrace-extend-extinguish" mantra.