Microsoft (NASDAQ:MSFT) has been mostly dead money for the past decade. Heck, even with the recent bull move in the stock market, the stock has been a huge disappointment. Shares are 13% in the red over the last year and have only gained 4% so far in 2013 vs. a nearly double-digit climb for the broader market.

Despite all this, Microsoft remains a solid tech operator. In all, the company has over $60 billion in the bank and generates nearly $20 billion in yearly free cash flows. Plus, it boasts franchise products like Office, Xbox and, of course, Windows.

So, is the gloom-and-doom overdone? To see, here’s a look at the pros and cons:

Pros

Enterprise. When it comes to infrastructure technology, Microsoft continues to be an innovator. In fact, the growth prospects look bright, especially with mega-trends like the cloud. Last year, Microsoft launched a new version of its Windows server, which has seen lots of uptake and has become critical for improving data-centers. Microsoft’s mobile operating system, Windows Phone 8, may also get a nice lift from business users. So far, it’s been Apple’s (NASDAQ:AAPL) iPad that has had success with enterprise customers. But the device does not generally have the kinds of apps that businesses want, so Windows has a big opportunity with the operating system … and with its tablet.

Xbox. The gaming system is massive, with an install base over 75 million … but it’s also more than just games. Xbox has actually been morphing into a general-purpose entertainment system. For example, it now has a rich source of movies and other premium content. Thus, the Xbox has an opportunity to become a popular TV supplement and a replacement for the traditional cable box. Oh, and Skype could replace the traditional telephone. In the latest quarter, the system logged 138 billion minutes — up 59% over the past year.

Valuation. Microsoft’s shares are trading at attractive levels. Consider that the forward price-to-earnings ratio under 9. The dividend is also at a decent 3.3%.

Cons

PC Business. This is a mature category and has seen sluggish growth over the years. One key factor is the emergence of tablets, such as the iPad and Amazon‘s (NASDAQ:AMZN) Kindle Fire. Plus, the main players in the PC ecosystem — such as Dell (NASDAQ:DELL), Lenovo Group (PINK:LNVGY), Acer (PINK:ACEIF) and Hewlett-Packard (NYSE:HPQ) — have been exploring new platforms beyond Windows, such as Android, to find growth opportunities. This could ultimately result in lower licensing fees for Microsoft.

Mobile. Microsoft has been a non-factor in this critically important business, although the company has certainly been aggressive in putting together a strategy and putting money behind it. For example, the company formed a joint venture with Nokia (NYSE:NOK) … but it has proven to be hard to get traction. While there are some signs of success with the new Lumia models, the overall results have been disappointing. Plus, because of the small mobile user footprint, it’s tough to get developers interested in creating apps for the Windows platform.

Mature Markets. Microsoft’s Office and Windows franchises still generate massive cash flows and continue to have significant competitive advantages. Office, for example, remains heavily entrenched in corporations across the world. As for Windows, it is the dominant system for PCs and laptops. The issue is that these businesses are mostly saturated. So to find growth, Microsoft needs to be successful in new markets. But over the years, the company has stumbled many times. Besides missing the mobile revolution, it has also botched other important categories like the Internet and social networking.

Verdict

Despite the challenges and competitive threats, Microsoft remains in a good position. The company has solid infrastructure technologies and there is a big opportunity to dominate the home-entertainment market with its Xbox.

But investors still want to see more — that is, they are looking for the company to get a meaningful share of the mobile market. To this end, the best hope may be to leverage its extensive background with corporate customers to become a big player in the tablet market. Besides its Surface, Microsoft also has the advantage of having strong relations with PC developers that are motivated to take share away from the iPad. Most likely, they’ll rely on the Windows 8 platform.

So if Microsoft can get mobile right, the share price could get a nice lift. It also helps that the current valuation is fairly reasonable and the dividend is dependable. In light of all these factors, the pros outweigh the cons.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.