Microsoft Admits Risk in Tablet Plans

Sometimes the only way to get a straight answer from a company on a thorny topic is through its government filings.

In an annual report that it submitted to the Securities and Exchange Commission on Thursday afternoon, Microsoft finally conceded something that has been rather obvious to anyone with a rudimentary understanding of the personal computer industry and Microsoft’s historical role in it. On page 14 of the document, Microsoft acknowledges that its Surface family of tablet computers could weaken support for Windows among Microsoft’s partners in the PC industry, known as original equipment manufacturers, or OEMs for short.

The company says in the document that “our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform.”

It’s a short, clinical comment buried in a document more than 100 pages long. But it comes closer to describing one of the big risks Microsoft faces with Surface than anything the company has said publicly before.

When Microsoft introduced Surface at a glitzy event in Los Angeles last month, I badgered every executive I could find to get one to at least address the fact that with Surface, Microsoft will start competing with its hardware partners. When I asked him whether Surface would hurt Microsoft’s relationship with those partners, Steven Sinofsky, the president of Microsoft’s Windows division, gave me a little push in the direction of some Surface tablets and told me to “go learn something.”

Other Microsoft executives haven’t tackled the issue either. Steve Ballmer, Microsoft’s chief executive, has talked about how Surface will “prime the pump” for all kinds of devices running Windows 8, the company’s new operating system. At a Microsoft sales conference earlier this month, Mr. Ballmer said that “the importance of the thousands of partners that we have that design and produce Windows computers will not diminish” because of Surface.

Competing with your customers is a delicate matter. It’s no surprise Microsoft wants to dodge the topic. Still, it’s nice to see Microsoft at least acknowledge one of the central risks in its Surface strategy, rather than pretending it doesn’t exist.