The latest whizbang show in Vegas (CES) showed many things with the most glaring being that a new smart phone player (Android) is indeed in town and the old stalwart (Microsoft) is just that, old.

Android is successfully taking a page out Microsoft and Apple’s playbook.  First, its operating system is open.  Meaning, fun and powerful improvements and applications will be fast and forthcoming.  Second, Android’s wide distribution will affect Apple’s new relationship with Verizon.  Sure, Verizon customers will be thrilled to finally play away on their new iPhone and will likely get an initial rush of new customers.  But the iPhone 4G does not run on Verizon’s 4G network, and vice versa, meaning the Verizon customer rush to iPhone will hit a serious wall.  Since Android reviews have been fantastic and Google is the next coming of, well Google, Apple may finally have a fight on its hands.

What’s sad is that Microsoft is not part of the conversation.  New phones, apps and technologies rule the conversation, yet Microsoft is not really mentioned to any relevant extent.  Kind of sad to watch.  Unless Microsoft regains control of the dialogue and commits to fast and fearless product development, its slide will continue.

Also, the three-year recession may have harmed Microsoft more than the others.  Here’s why.  As companies downsized, employees departed large Windows-based firms – the core domain for Microsoft – for the unemployment line.  These MS-trained and once totally committed Windows folks were effectively thrown into the world of home computing where Apple now rules.  As the unemployed start their own firms or eventually go back to corporate life among other small firms, it’s not Microsoft that will come to work with them.  It will be Apple, Facebook and Google.  And Microsoft will be pushed farther out the relevancy door.

Microsoft is down, but hopefully not out.  Much like the banks deemed ‘too big to fail,’ I sincerely hope the same for Microsoft.  That said, old and irrelevant is no way to grow.  Grow old, sure, but not to grow.