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TheStreet Open House

Death of the PC Not the Death of HP, Dell

Stocks in this article: DELLHPQMSFTAAPLRIMMGOOGAMZNQSFT

NEW YORK ( TheStreet) -- It has been a couple of weeks since software giant Microsoft (MSFT) told its OEM partners Hewlett-Packard (HPQ) and Dell (DELL) they now have to start carrying their own weight.

In revealing its plans for the Surface tablet bearing its own name, Microsoft has essentially proclaimed its hardware independence. The implication is that it wants to stomach the responsibility for its own successes and failures -- the same model that has helped Apple (AAPL) become the largest company in the world while sending Research in Motion (RIMM) in a death spiral toward irrelevance.

In fact, the so-called "unified platform" has been so successful for Apple it has Google (GOOG) now working hard to emulate it by essentially becoming a rival to its own partners in Amazon (AMZN) and Samsung with its own tablet in the Nexus 7.

It appears things have turned upside-down as the technology sector is abandoning an old working concept, one that was akin to the separation of the branches of government.

For years it's been understood that original equipment manufacturer partnerships was the effective model -- splitting the makers of hardware from those that specialize in software. The question is, where does this new change leave the hardware vendors, now apparently under attack by their own software partners? If software companies are now entering hardware, what is left for them?

Before we answer this question -- one that can venture into a number of directions -- we need to make a few safe assumptions while also seeking to understand it is very possible the changes we are witnessing can very well signal the beginning of the end of the PC era.

What we will be left with is a new age of computing led by the three-headed monsters of Apple, Microsoft and Google, an era (similar to the rise of the PC) that will feature a rash of consolidation just as when HP acquired Compaq and lesser-known brands such as AST and Digital Equipment went defunct.

But it seems this new shift in model has been anticipated -- neither Hewlett-Packard nor Dell appear surprised. Their responses have been something like, "Since our software partners are entering hardware, we need to respond back by entering software."

In fact, Dell has been on a shopping spree of late by having spent $2.4 billion dollars to scoop up Quest Software (QSFT). This comes on the heels of its recent acquisition of SonicWall for an estimated $1.2 billion.

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