Microsoft has a pretty grand plan.... and passport is the heart of it. No, not because its some authentication web service, but because it stores, every company that uses passport, customer data with Microsoft. Customer data is THE most important thing for most companies, and now that Microsoft will have access to it, they can introduce new products to those customers, and compete agaisnt the companies that use passport. For example, if im a user of KaZaa, and KaZaa uses Passport, Microsoft can instead promote their own music service, MSN Music (yes i know its nothing compared to it, but try and get the whole picture.) over KaZaa. And draw customers to their services. (I have a lot of good friends at the company)
Microsoft will also start competing with Sony and other electronics manfuactors (xbox anyone?), they've already started introducing several hardware devices, most recently the TV Photoviewer, Microsoft Wireless IntelliMouse, Ultimate TV, and there's another device slated to come out next year, that will throw together a CD Player, DVD player, and will be designed to control the "digital home". It will be loaded with Microsoft software, and tie into other Microsoft services. Microsoft also sells Keyboards, speakers, MSN WebTV and gaming devices.
And according to my sources at Microsoft Research, they have been researching ways to develop storage devices, micro-processors, and a bunch of other things.
