It actually failed at what Bill Gates feared it would to: it is pervasive, but not a competition to Windows and the Windows GUI stack. Smartcards were never MS's target market, and nobody was yet thinking about smartphones.
https://techmonitor.ai/technology/microsoft_to_slash_smart_c...: “Microsoft Corp has plunged into the smart card market with an operating systems that will compete with existing systems such as MultOS and Java Card
[…]
Microsoft’s Smart Cards for Windows is an 8-bit operating system with 8K of ROM”
That was October 1998. About a year later, there was https://news.microsoft.com/1999/11/15/microsoft-delivers-win...
I don’t think that went far, but they certainly tried.
I think what most helped it was that it was the common language against early commercially-supported app servers from big vendors.
BSD started as a Pascal compiler for Unix and enabled a community of researchers to work with a common language on machines more accessible than those from DEC.
Bill was right that consumer-oriented products with server-side software had Java as the wind at their backs.
Actually, people were, even the non-technical everyday Joe. I remember a sales guy commenting once at a beginning of a meeting as he pulled out his PDA and set his oversized cell on the table "I'm just waiting for the day they combine these together so I only have to carry one of these". I think this would have been 1998 or 99, but people talked about "PDA phones" for quite some time before the iPhone appeared on the scene. The technology just wasn't there, and the CE based PDAs were clunky, nearly useless.