Technology Pundits: Intel Buys Wind River, does Microsoft buy AMD? Jun 4, 2009 – By Rob Enderle
When vendors expend out of their core areas they often drop into the space
occupied by a partner. Right now Oracle is moving into hardware by buying Sun
which may have both HP and Dell treat them vastly differently as a result
putting large chunks of revenue at risk. This is part of the hidden cost of
an acquisition.
Intel vs. Microsoft: Building a War
Intel and Microsoft aren't very close, in fact for those of us that watch
them, the two firms generally appear on the brink of all out war from time to
time. Their last secret collaboration that has become public had to do with
the Windows Vista launch, adjusting the bar for Vista Ready certification to
include Intel's low end products and all of this resulted in a massive class
action law suit. Microsoft has been, like Apple, quietly building a chip
competency center and the recent Xbox processor was a co-designed by
Microsoft and IBM.
Intel has been actively supporting Linux and has their own Linux distribution
called Moblin which has had some success. These efforts, until now, annoyed
Microsoft but did not appear to lead to open conflict. The acquisition of
Wind River may push Microsoft too far.
Wind River: A Bridge Too Far?
Wind River is one of the major powers in the embedded software space and a
recognized competitor to Microsoft. These two companies in the embedded space
are actually rather closely matched at the moment and this is a strategic
market for Microsoft. By buying a primary Microsoft competitor Intel, in
effect, becomes a primary Microsoft competitor and that should change some
things. Granted it wouldn't be as bad as if they bought Google, or Red Hat,
but the cold war between the two companies now could escalate into open
conflict much more easily.
Will Microsoft buy AMD?
Unlikely but this is now the path that Intel and Microsoft may be on. Once
into the software business you are either all in or your acquisition fails
and these things have less than a 20% chance of success. This means that
Intel will likely have to double down and their next acquisitions will push
them farther and farther into Microsoft's business and Microsoft should then
have to use AMD and NVIDIA increasingly as a competitive block.
The cost of this conflict could make the battles between AMD and Intel look
trivial in hindsight because we are talking big players here each of which
has showcased unprecedented power and tendencies to act first and think
later.
Intel took a big shot at Redmond when they moved to buy Wind River, now we
are just waiting for Redmond to Respond.
