They called it Wintel.

For decades, two companies worked side by side to build the very foundation of personal computing. Microsoft built the operating system—Windows—and Intel built the chips. But Wintel is no more. Sure, Windows will continue to run on Intel chips. But Wintel as a mighty alliance has died. It's been fading for years, and this week Microsoft snuffed out the last of it.

On Wednesday, from a conference stage in Silicon Valley, Microsoft told the world it plans on using ARM chips in the servers that underpin Windows Azure, the sweeping collection of cloud computing services that represents the company's future. It was the most tactical of announcements, a carefully considered collection of words meant to shift computing's balance of power. Microsoft has yet to actually put ARM chips in the data centers that run Azure. It merely pledged that it would.

'We've seen these kinds of announcements before. The question is: How ready is the technology?' Jason Waxman, Intel

"All this is before we've actually seen a chip," says Patrick Moorhead, the president and principal analyst at Moor Insights and Strategy, a firm that closely follows the chip business. In other words, this announcement isn't about technology—at least not yet. It's little more than a push against Intel's market power. Like Google and Amazon and others, it seems, Microsoft wants an added bargaining chip when buying computer chips from the biggest computer chip maker on Earth. The question: will it get what it wants?

With online empires like Google and Amazon running on open source Linux and the citizens of the world spending so much of their time on iPhones and Android, the Windows operating system is no longer dominant. At the same time, Intel's influence has diminished: Most of those mobile devices use ARM chips from other companies. But in one market, Intel still rules. Google, Amazon, and most other online services still run on Intel chips. In fact, these chips drive 99 percent of the world's computer servers. But Google and Amazon don't quite like that reality. Now it's clear that Microsoft doesn't either.

The problem isn't so much technology as economics. If you run a large online service, Intel pretty much offers the only option for decent server chips. No real market competition exists to keep prices down. At the same time, Google, Amazon, and Microsoft build their own servers and negotiate their own chip prices in the process. Their online empires are so big, spanning hundreds of thousands of machines across the globe, they create chip markets unto themselves. By publicly pledging to use servers equipped with ARM processors from Qualcomm and Cavium, Microsoft is apparently looking for leverage when negotiating chip prices with Intel. "That sounds plausible to me," says Intel vice president Jason Waxman.

Consider this: In 2012, Intel vice president Diane Bryant told WIRED that Google bought more server chips from Intel than all but four other companies. And the other four actually sell servers. Google does not. It only builds servers for itself. As such, internet giants like Google represent the future of Intel's server business—and indeed the entire server business. Sure, Intel will continue to sell chips to other companies. But increasingly, other companies run their operations on the cloud servers of Google, Amazon, and Microsoft.

Pulling Levers

In theory, ARM server chips could also help Microsoft save money on electricity. Based on the same chip designs used in your smartphone, these processors use relatively little power. Across a worldwide network of data centers, those savings that can make a big difference. But that difference doesn't mean much now, since viable ARM server chips don't really exist. Qualcomm and Cavium are "sampling" their chips, which means they've built test versions. But both tell WIRED they won't have finished chips until the end of the year.

As Microsoft makes its chess move, you can't overlook the reality of that the silicon isn't finished. Google made a similar move about 18 months ago, publicly announcing that it would work to build servers around IBM's OpenPower chip, another alternative to Intel. This move too was a way to gain leverage against Intel, after online giants publicly professed their interest in alternative server chips for years. But Intel still controls 99 percent of the market. "We've seen these kinds of announcements before," says Intel's Waxman. "The question is: How ready is the technology?"

Google and Microsoft may want added competition in the chip market, but that doesn't happen without many years of work. Intel controls 99 percent of the market because it has a mature technology that can run all the server software companies like Google and Microsoft require. Even if chipmakers like Qualcomm and Cavium build viable server chips, the market won't really enjoy real competition until a broader community of companies builds the foundational software that allows these chips to operate in the real world.

For Microsoft, this poses a particular problem. Unlike the rest of the big players, which use Linux, Microsoft still runs Windows in its data centers. While other companies have long worked to get Linux running on ARM server chips, Microsoft's switch would represent the first effort with Windows. It can't really benefit from what others have done—a common problem for Microsoft in world that revolves around open source software. Yes, Microsoft vice president Jason Zander tells WIRED that the company is already years into this project, that it wouldn't be revealing the effort if it weren't on solid ground. But at the very least, it's a year until anyone will know how solid.

The glory days of Wintel have passed. Microsoft wants to move on. But that may take a while.