Microsoft’s self-developed chips: the end of the “Wintel” myth?

The myth of the Wintel alliance created by Microsoft and Intel seems to be coming to an end.

Not long ago, Reuters reported that Microsoft is developing and designing Arm-based processor chips for its Azure cloud computing servers and Surface series personal computers to reduce its dependence on Intel.

As soon as the news came out, Intel’s stock price closed down 6.30% on the day, and its market value evaporated by 13.077 billion US dollars.

  1

The “Double Overlord Myth” in the Windows+Intel PC Era

As the saying goes, the times create heroes.

On August 12, 1981, IBM officially launched the world’s first personal computer, the IBM 5150. At that time, IBM changed the company’s tradition in order to accelerate the research and development progress. The IBM 5150 adopted common standard components and opened all technical data except BIOS, which promoted the standardization process of the entire industry and made PC compatible machines possible, which was of pioneering significance.

In 1982, Time magazine named the IBM 5150 “Machine of the Year,” a machine that truly ushered in the “PersonalThe beginning of the myth of Microsoft and Intel’s “double hegemony”.

In order to launch personal computer products “quickly and quickly”, IBM sent a big gift to Microsoft and Intel, which were still small at the time. IBM 5150 chooses to use Microsoft’s disk operating system DOS1.0, and configure Intel X86 architecture 16-bit processor 8088. Since then, Microsoft and Intel have become famous with the IBM 5150, which has become an important turning point in the development history of the two companies.

Subsequently, PC manufacturers gradually formed the habit of finding Microsoft for operating systems and Intel for processors, and Microsoft and Intel gradually formed“Wintel” alliance, namely Microsoft Windows operating system + Intel (Intel) processor.The two worked closely together to push Microsoft’s Windows operating system to run on Intel-based PCs.

  Microsoft’s self-developed chips: the end of the “Wintel” myth?

Image source: Microsoft official website

For a long time, the powerful Wintel alliance has been invincible in the field of personal computers, forming a “duopoly” monopoly, occupying more than 90% of the global personal computer market, and almost all personal computers use Intel X86 processors + Microsoft Windows Operating systems, both of which exert their advantages in hardware and software respectively, and synergistically update, firmly occupy the commanding heights of the market with a dominant attitude, and become the two most profitable industrial giants in the era of personal computers.

Of course, it is not that no one has tried to challenge the most powerful combination of winning the Wintel Alliance. In the early 1990s, Apple, IBM and Motorola formed an alliance to jointly push the PowerPC processor, trying to break through the Wintel Alliance’s control in the field of personal computers. In the face of challengers, the Wintel Alliance launched a counterattack, Intel launched the Pentium series of chips, and Microsoft also launched the Windows 95 operating system. Then, the PowerPC Alliance ended without a hitch.

In the era of personal computers, the Wintel Alliance occupied the global personal computer market, and IT industry even called the entire era of personal computers the “Wintel” era. Although the Wintel Alliance is historically controversial, it has to be admitted that during those historical years, Microsoft and Intel stood at the top of the personal computer industry chain, creating a myth of “double hegemony”.

  2

Revolutionary friendship is cracking, and Arm architecture is tested for the first time

However, the Wintel alliance, which once fought hand in hand and laid down a large area of ​​the country, finally appeared cracks.

With the rapid development of the mobile Internet, both Microsoft and Intel have chosen to enter the mobile terminal market. It is a pity that both of them were all-powerful in the era of personal computers, but they both missed the era of mobile Internet. In the era of mobile Internet, Windows+Intel is no longer the optimal combination, and Microsoft and Intel began to try to choose new partners.

In 2010, Intel teamed up with Nokia to develop the Meego mobile operating system, and then announced a series of cooperation with Google to launch products such as mobile phones and tablets based on the X86 architecture of the Android operating system. As for Microsoft, its Windows Mobile, Windows Phone, and Windows 10 Mobile, which have successively launched in the smartphone field, all adopt the Arm architecture.

However, the new partners could not restore the decline of Microsoft and Intel in the smartphone market. Intel’s X86 architecture was defeated by the Arm architecture, and Microsoft’s Windows Phone was later withdrawn. In 2016, Microsoft CEO Satya Nadella bluntly said, “We obviously missed the mobile market.” Of course, this is something else.

At that time, Microsoft also began to experiment with Arm architecture in its personal computer business. In April 2012, Microsoft officially released the Windows RT operating system based on the Arm architecture. Two months later, Microsoft launched its first-generation tablet Surface, Surface has two versions, Surface RT and Surface Pro, of which Surface RT is equipped with Windows RT operation. The system uses a processor based on the Arm architecture, and the Surface Pro is configured with a traditional combination Windows 8 operating system + Intel processor.

Image source: Microsoft official website

The release of Surface RT is seen as a landmark move by Microsoft to test the waters of the Arm architecture. In September 2013, Microsoft continued to release Surface 2, the second-generation tablet computer equipped with the Windows RT system. However, regardless of Surface RT or Surface 2, the market response was relatively dull, and brand manufacturers such as Toshiba, Samsung, and Acer also announced the abandonment of Windows RT products.

In January 2015, Microsoft issued a statement announcing the discontinuation of Surface 2, and its third-generation tablet Surface 3 and Surface Pro 3 all series returned to the full version of the Windows operating system + Intel processor combination. This means the end of the Windows RT operating system, and it also means that Microsoft’s first attempt to move to the Arm architecture in the personal computer field ended in failure.

3

Microsoft suspects that it is making its own cores, and the Wintel alliance will “disintegrate”?

However, Microsoft did not give up.

In December 2016, Microsoft announced at the WinHEC 2016 hardware conference that Windows 10 will fully support the Arm ecosystem and will use Qualcomm as a partner. Based on this collaboration, hardware partners will be able to launch Windows 10 PCs powered by Qualcomm Snapdragon processors. So far, Microsoft has also reached out to Arm, Qualcomm, etc. while “favoring” Intel.

Image source: Microsoft official website

Today, it is rumored in the industry that Microsoft is developing its own processors based on the Arm architecture. In response, a Microsoft spokesperson said, “Chip is the foundation of technology, and we will continue to invest in areas such as design, manufacturing and tools, while also promoting and strengthening partnerships with numerous chip providers.”

These remarks are quite subtle. They neither admit nor deny the matter of self-developed processors, but it is not difficult to see from their words that Microsoft is open to chip suppliers, leaving us more room for imagination. .

If cooperation with chip manufacturers such as Arm, AMD, and Qualcomm is the crack between the Wintel alliance, then Microsoft’s self-developed processors are regarded by the industry as a sign that the Wintel alliance will “disintegrate”, because there are already examples to follow.

In June 2020, Apple announced at the 2020 WWDC that it will use a self-developed processor based on the Arm architecture on the new Mac. In November of the same year, Apple’s first self-developed computer processor M1 was officially unveiled, and all three of its new Mac series replaced the Intel processor that had been used in the previous Mac series for 15 years with the M1 processor. If Microsoft’s self-developed processor is true and the research and development is successful, Intel may face a similar encounter again.

Image source: Apple’s official website

Currently, Intel is still Microsoft’s most important partner. Microsoft’s cloud service Azure mainly uses Intel processors based on the X86 architecture; most of the Surface product line still uses Intel processors. However, Surface Pro X and the upgraded Surface Pro X use Microsoft’s Arm-based architecture jointly developed by Microsoft and Qualcomm. The SQ1 processor, Microsoft SQ2 processor, and the 15-inch Surface Laptop 3 use AMD’s custom processor.

As a software-based manufacturer, why did Microsoft choose its own processor? Maybe we can also get some inspiration from Apple. From a certain point of view, Microsoft and Apple are slightly similar. Both have operating system software and personal computer terminal products in business, and both have cooperated with Intel for many years in personal computer products.

Regarding the self-developed processor M1, three Apple executives said in an interview that the unoptimistic development of Intel processors in recent years is not the fundamental reason for Apple’s self-developed processors, “It’s about what we can do, not about what others can do. The question of what to do or not to do”, Apple’s self-developed processors are more to make software, systems and products closely integrated.

In the traditional personal computing business, Microsoft is facing market pressure brought by Apple’s self-developed processor M1, and the success of Apple’s M1 will also stimulate its own road to self-developed processors. In the field of cloud computing, Internet/software manufacturers and other self-developed processors have already become commonplace, and Google, Amazon, Alibaba, etc. have all been on the road of “core building”.

For them, on the one hand, self-developed processors can reduce their dependence on Intel, on the other hand, they can adapt to their own products, improve efficiency, reduce costs, and create an ecosystem of cloud integration and software and hardware collaboration.

Today, Microsoft, which has fallen behind in the mobile Internet era, has placed great hopes on the cloud computing business.

In October 2020, Microsoft released its financial report for the first quarter of fiscal 2021. Its revenue in the quarter was US$37.2 billion, a year-on-year increase of 12%. Among its three business segments, the revenue of the intelligent cloud business was US$13 billion, which has been become its largest source of revenue and growth driver. In fact, Microsoft currently ranks second in the global cloud computing market after Amazon.

Although server chips have long been dominated by Intel X86, in the face of massive data in cloud computing, Arm-based chips have gradually shown advantages in terms of computing power, power consumption, and cost in recent years, and cloud computing manufacturers have begun to switch to the Arm camp. For example, Amazon, a leading company in the cloud computing market, its cloud computing service platform AWS released the first self-developed cloud server CPU Graviton based on Arm architecture as early as November 2018.

There is Amazon in the front and Apple in the back. The industry is not very surprised by the rumor that Microsoft is developing its own processor. Perhaps it is more that the former golden combination Wintel alliance may eventually collapse.

 4

Can the end of the “myth” brew a new legend?

As the saying goes, there are no permanent friends, no permanent enemies, only permanent interests, and the same is true for Microsoft and Intel.

When the rumor of Microsoft’s self-developed processor came out, many media began to worry about Intel, such as “Microsoft and Intel broke down”, “Intel will be abandoned” and so on. For now, even if the rumors are true, it will not be easy for Microsoft to get rid of Intel completely in the short term. The Wintel alliance may no longer exist, but the cooperation between Microsoft and Intel will not necessarily end.

Assuming that Microsoft successfully develops its own processors, it is foreseeable that Microsoft will replace Intel processors with self-developed processors. However, whether in the field of servers or personal computers, Intel still dominates the market and has built a huge and powerful ecosystem. Microsoft wants to tear off the “Wintel” label firmly attached to it and rebuild the ecosystem. easier said than done? This is a very test of Microsoft’s determination.

With its cloud computing business, Microsoft has begun to rejuvenate, while Intel, which in recent years has been considered by industry insiders to be entering a “middle-aged age” with the passing of the personal computer era. Now Microsoft is rumored to develop its own processors, and Intel is considered to be in crisis. In fact, no matter whether the self-developed processor rumors are true or not, Microsoft’s previous embrace of Qualcomm, Arm and other behaviors has already reminded Intel, and Apple M1 has also sounded the alarm for Intel, and Intel will not have no plans.

Looking back on Intel’s development history, it has stepped on countless thunders along the way, but they have carried it over again and again, fell into the pit, climbed up and moved forward, and eventually became the overlord of the semiconductor industry. Today, Intel is facing key transformations and major challenges. Time will tell us what its fate will be in the future. It may still be too early to say that Intel is “in decline”.

However, both Microsoft and Intel have to admit that the Wintel era that belongs to them has passed, and the “double hegemony myth” may come to an end. But who knows, are these two former overlords brewing a new legend?

 

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