Why Intel Is Up and Microsoft Is Down
Sure, Microsoft and Intel remain extremely close partners. And both companies remain industry giants. But if you examine the latest financial results from Microsoft and Intel, you’ll see first-hand proof that the old Wintel pals are no longer joined at the hip — at least not when it comes to sales and financial results. Here’s the scoop.
Investors Business Daily and other major media sites claim the recession is taking a big bite out of Microsoft’s revenues. Ummm… that’s only part of the story.
Wake up, Wall Street: This isn’t a recession story. It’s a disruption story.
Simply put: Intel is capitalizing on the very same market disruptions that are wounding Microsoft… SaaS, cloud computing, open source, netbooks and mobile devices, Google, and the list goes on.
The most recent proof: Amid Microsoft’s challenges, Red Hat continues to grow and recently landed on the S&P 500 Index.
Let’s rewind to the 1990s. In many ways, Microsoft and Intel were joined at the hip in terms of product releases and financial results. The Pentium-Windows 95 combo drove hardware refreshes, PC network deployments and application deployments across the globe.
When Microsoft won, Intel won — and vice versa, from laptops to desktops and even servers, where Wintel gutted the Unix-RISC market.
Fast forward to the present. Intel still wants to be inside everything — but the effort has expanded from tiny mobile devices to massive cloud and SaaS data centers. Oh, and Intel opened up to Linux — partnering up with Red Hat, Novell, Canonical and others. Plus, Intel is a big, big proponent of Moblin (mobile Linux).
To be clear, The VAR Guy isn’t burying Microsoft. All traditional software companies face cloud, SaaS and open source challenges. But in Microsoft’s case, the challenges are magnified because the company has so much market share at stake.
And yes, many of Microsoft’s SaaS partners are thriving. Ever heard of Azaleos, Intermedia and GroupSPARK? Take a look, and you’ll discover quite a few folks profiting from hosted/SaaS versions of Exchange Server and SharePoint.
Still, the bigger picture for Microsoft is challenging. Windows 7 and Office 2010 are just around the corner. But Microsoft’s upgrades no longer sit at the center of the software universe. Microsoft knows it, and Intel knows it.