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Information technology in transition
As Microsoft and Intel move apart, computing becomes multipolar
Jul 29th 2010
THEY were the Macbeths of information technology (IT): a wicked couple who seized power and abused it in bloody and avaricious ways. Or so critics of Microsoft and Intel used to say, citing the two firms’ supposed love of monopoly profits and dead rivals. But in recent years, the story has changed. Bill Gates, Microsoft’s founder, has retired to give away his billions. The “Wintel” couple (short for “Windows”, Microsoft’s flagship operating system, and “Intel”) are increasingly seen as yesterday’s tyrants. Rumours persist that a coup is brewing to oust Steve Ballmer, Microsoft’s current boss.
Yet there is life in the old technopolists. They still control the two most important standards in computing: Windows, the operating system for most personal computers, and “Intel Architecture”, the set of rules governing how software interacts with the processor it runs on. More than 80% of PCs still run on the “Wintel” standard. Demand for Windows and PC chips, which flagged during the global recession, has recovered. So have both firms’ results: to many people’s surprise, Microsoft announced a thumping quarterly profit of $4.5 billion in July; Intel earned an impressive $2.9 billion.
So now is a good time to take stock of IT’s most hated power couple. As The Economist went to press, Intel was on track to reach a settlement with America’s Federal Trade Commission (FTC), which would in effect end the antitrust woes that have plagued both firms. And Microsoft has recently strengthened its ties with ARM, Intel’s new archrival. This suggests that the Wintel marriage is crumbling.
Critics have often questioned both firms’ technological prowess. Yet Windows 7, the latest version of Microsoft’s operating system, is excellent, and customers have snapped it up. As for Intel, its manufacturing machine is peerless. Some of its transistors are so tiny that 2m would fit on the “.” at the end of this sentence.
Both firms have often co-operated, despite occasional crockery-throwing. Microsoft has been pushier: in the mid-1990s, for instance, Mr Gates leaned heavily on Andy Grove, Intel’s boss, to stop the development of software that trod on Windows’ turf. Intel backed down.
