Microsoft Corporation (MSFT) Not Just Software: Ballmer

Microsoft Corporation (NASDAQ:MSFT) has developed quite a legacy in the tech world by developing software like the Windows operating system and all things related. But with the impending release of the proprietary tablet computer called the Surface, there has been some speculation that Microsoft Corporation (MSFT) could be evolving into in its full ecosystem from soup to nuts, just as Apple Inc. (NASDAQ:AAPL) has done.

That speculation was pretty much confirmed by Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer in a letter to investors recently. His statements now may beg the question – if Microsoft Corporation (NASDAQ:MSFT) can make its own tablet computer and be successful with the project, does that mean that a smartphone might be next? Will hardware partners be phased out of the Windows universe? These are questions that investors – like billionaire fund manager David Einhorn of Greenlight Capital – may likely be asking after they read Ballmer’s letter.

In the letter, which Microsoft Corporation (NASDAQ:MSFT) send to shareholders every year, Ballmet said that it was time to no longer think of Microsoft Corporation 9MSFT) as just a software company, but as a “devices and services company.”

“This is a significant shift, both in what we do and how we see ourselves,” he wrote. “It truly is a new era at Microsoft.” Ballmer goes on to make the case that Microsoft Corporation (NASDAQ:MSFT) is positioned to develop hardware to complement services in the cloud. So does this mean that the Surface tablet is not just an experiment but is the start of becoming like Apple Inc. (NASDAQ:AAPL)?

“Fantastic devices and services for end users will drive our enterprise businesses forward given the increasing influence employees have in the technology they use at work a trend commonly referred to as the Consumerization of IT,” Ballmer wrote.

Can Microsoft Corporation (NASDAQ:MSFT) pull off being another self-contained ecosystem like its rival, Apple Inc. (NASDAQ:AAPL)? “You can’t be a copycat and you can’t do this haphazardly,” he says. “You need unique devices and a unique user experience,” said Jim McGregor of Tirias Research.

Does the Surface tablet qualify? And does this mean a Microsoft smartphone is on the horizon?