The Atlas Lions gave a lackluster performance in the decisive Group A match that saw them lose to Ghana 2-0 and exit the African Cup of Nations from the first round.
Michel attributed their loss to the inability of his players to break into the Ghanaians half.
"I can't talk about a match because there was not one, we totally failed," Michel said after the game.
"We didn't win a single tackle and didn't put two passes together. The analysis is severe: It's a failure," the Frenchman added.
Morocco got off to a strong start at the 2008 CAN, crushing Namibia 5-1, but it was all down hill from there as they stumbled to a 3-2 defeat against Guinea and exited the tournament after bagging only three points that left them in third place.
It is the second successive time that Morocco were drawn in the same group as the hosts and exit the competition from the group stage.
Yet, Michel insisted he was staying on board and that he will "build a formidable team for future engagements".