Mary Jo Foley has a good look at the rumors popping up that Microsoft is going to produce its own Windows 8 tablet. Her take that Microsoft should let its partners get some Windows 8 tablets to market is right on the money. I would even take it a bit further and put forth that Microsoft cannot make a tablet without dire consequences.
The argument that Microsoft needs to take its own destiny in hand and make its own Windows hardware is not a new one. Pundits made the argument for a Microsoft phone before Windows Phone 7 products entered the market, and for largely the same reasons that are given now for a tablet. While the company could have tested entering the hardware business with a Windows Phone product with relative ease, it passed on building its own Windows Phone. It would be hard to now pick up the production of a tablet as it would throw the entire Windows ecosystem into disarray, and not even Microsoft cannot afford that.
The mobile side of Microsoft's business is not a big part of the company's revenues, but that's not the case with the Windows division. A Microsoft branded tablet would upset all of the company's Windows partners, and that represents a big chunk of the company's business. No matter how a tablet was approached, partners would perceive that a product from the platform owner would have an insider's advantage, and that would be the case. It's hard to compete with a player that holds both all the cards and produces the deck, and that's what partners would be up against no matter how fair Microsoft tried to be.
Microsoft has always counted on its major partners to push the envelope for new hardware running its software, a practice that would likely end once it starts competing with those partners. Who will be willing to make a big investment in time and resources to work with Microsoft on new types of products if the company starts directly competing with them, even in a different area?
The competitive nature of Microsoft's entering the Windows hardware game would affect its dealings with all partners. The company has discussions with others constantly, all of which would start taking a hard look at what is shared. Businesses cannot afford to divulge too much to the competition, even if normal dealings are required; the relationships become guarded out of necessity.
Microsoft is full of bright people who could no doubt produce a great tablet internally. The question is not can they do it, rather should they? My answer to that is a resounding no.