Microsoft's New Model: 'Every Man For Himself'

NEW YORK ( TheStreet) -- I'm starting to hear rumblings that both computer giants Dell ( DELL) and Hewlett-Packard ( HPQ) are now starting to feel "betrayed" by Microsoft ( MSFT). In its competition with Apple ( AAPL), the software giant last week unveiled its Surface tablet, a move that seems to have sent its computer-building partners the message: it is now "every man for himself."

As annoyed as I have become with the idea that both Dell and HP somehow expected a certain level of loyalty from Microsoft, it bothers me even more for them to pretend that the partnership was even remotely working when the numbers show that Apple has been eating their lunch over the past 12 quarters.

Essentially, the message Microsoft sent on Monday was that it had grown tired of being bullied and going hungry -- and for that it shouldn't be blamed. Furthermore, in an interview after the announcement, the company's CEO Steve Ballmer said its PC partners knew about the Surface tablet well in advance of the announcement.

Now, exactly who he was referring to is unknown, but I think it is safe to say that the top two Windows vendors over the past decade certainly would have been on any short list of phone calls made -- at least one would hope.

There are definitely at least two sides to every story. What we know is that Microsoft cloaked the event leading to the announcement with secrecy. First, it announced a press conference, sent invitations to the media, but opted to be purposely vague in terms of its description of the event, except to say that it would make a "major announcement."

So, do HP and Dell have legitimate gripes here? Well according to a recent Reuters article, Microsoft offered its partners the same level of treatment as it did with the press.

The article claims the company did not provide its partners with any details about what it was going to say to the public until three days (Friday) before the announcement. The report claims that its partners didn't even know the tablet was going to be called "Surface." For that matter, they didn't even know it was going to be a tablet. So now what?

Well, they just have to move on and deal with it. I don't think any of Microsoft's partners have a choice but to pick their chins off the ground and get over it. Apart from Amazon ( AMZN) and its Kindle Fire, nobody has been able to make a dent in Apple's tablet dominance except for maybe Samsung's Galaxy tablet, which relies heavily on Google's ( GOOG) Android OS.

Microsoft saw the impact that Amazon was able to make in such a short period of time and figured a unified platform was the way to go, since clearly neither Dell's Streak or HP's TouchPad could measure up. The PlayBook by Research in Motion ( RIMM), amounts to little more than a paperweight.

So, for current Microsoft partners who are battling broken feelings, there are limited options here. They have to deal with it and make it work or try to compete against Apple themselves without the support of Microsoft, which is on the verge of releasing possibly its the best operating system since Windows 95.

We must not discount that Microsoft understood the repercussions. By entering hardware, it realized it was becoming a competitor to its partners. Although it is still early, it appears that Lenovo and Dell have voiced their support and proclaimed their continued commitment toward sustaining their relationship with Microsoft.

Bottom Line

That sounds great, but again, do these companies really have a choice? Who else is developing operating systems for their enterprise customers?

And I wonder if those partners will change their tune once Microsoft's pricing -- in the attempt to undercut the iPad -- begins to cut into partners' sales?

Certainly, undercutting iPad is the name of the game. What would be the point of Surface if not to steal market share from Apple? Clearly, Microsoft understands this.

I think the company has appraised the situation and so far appears willing to sacrifice some casualties if it means taking shots at Apple. Unfortunately for its partners, they are the possible casualties.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, the author was long AAPL and held no positions in any of the stocks mentioned, although positions may change at any time.