Microsoft is always taking a beating for not being original and not being innovators. They copied the UI from Xerox, they were the last to get on to SAAS etc. However Google and to some extent Yahoo! are perceived to be very inventive and creative.

I personally think that none of them come up with original ideas, they just have the resources to perfect them over time. Microsoft with their OS has made it, one of the easiest to use. Google with their search have vastly improved it, since its inception.

So are they not innovators? Innovation to me is doing something very well, iterative, consistent, incremental improvements based on feedback from end users. Google is not original with its “new” calendaring services, or the just announced social bookmarking and vertical search. But rest assured they will improve it and refine it over time to make it such that it is a cut above the rest. So is true with Toyota and Honda – how many iteration have we seen of the Camry and Accord? Pure incremental refinement till they almost seem disruptive inventions.

Keen observation, good analysis and the ablity to translate them to actionable things are great tools that lead to innovation.