CAVM Cavium, Inc. (delisted)

By Ted Greenwald 

Microsoft Corp. on Wednesday will demonstrate a version of its server operating system running on processors based on technology from ARM Holdings PLC, throwing its weight behind efforts to crack Intel Corp.'s near-total dominance in data-center chips.

The move is a marked change for Microsoft, which for years has built Windows Server to run on chips designed around technology from its once-steady partner Intel.

Microsoft said in a blog post planned for Wednesday it collaborated with Qualcomm Inc., the leading supplier of chips for smartphones, and Cavium Inc., a lesser-known Silicon Valley chip maker, to adapt Windows Server to run on their ARM server chips. It worked with several ARM suppliers to optimize their chips for its data-center needs, it said.

The ARM version of Windows Server, which is scheduled to be demonstrated at a Silicon Valley conference devoted to open standards in computing hardware, was developed for internal use in Microsoft's Azure cloud-computing service, the blog post said.

Through testing, Microsoft said it found ARM server chips "provide the most value" for certain cloud tasks including search and machine learning.

"We feel ARM servers represent a real opportunity and some Microsoft cloud services already have future deployment plans on ARM servers," the company said.

At the open-hardware conference, Qualcomm plans to announce an open-source design for a server using its ARM-based Centriq 2400 server chip that is compatible with Microsoft standards for cloud-computing systems.

Chips based on ARM technology are one aspect of an effort by many semiconductor companies to challenge Intel in the server market, where the Silicon Valley giant generated $17.2 billion in annual revenue last year and holds nearly 100% share, according to Mercury Research.

"We're not interested in felling the giant in one fell swoop," said Anand Chandrasekher, senior vice president of Qualcomm Data Centers. "We're going to be chipping away."

Other chip makers are taking different approaches to challenging Intel. Advanced Micro Devices Inc. on Tuesday issued specifications and performance benchmarks for a server chip, based on its new Zen architecture, that it said would reach the market in the next few months. International Business Machines Corp. has said it would ship new server chips based on its own designs in the second half of the year.

"We take all competition seriously," Intel said, responding to AMD's announcement, "but we have to wait and see if the claims match the realities, especially with real-world applications."

Intel expects later this year to launch its own next-generation chips, and it is moving aggressively to capitalize on its acquisitions of Altera Corp. and Nervana Systems, makers of key technologies for boosting computing performance.

ARM technology, while an overwhelming favorite in smartphone chips, has faced a rough road in the server market. Several companies including Advanced Micro Devices Inc., Broadcom Co. and Texas Instruments Inc. have tried to bring ARM-based chips to the market with little to show for it.

"This class of product does not scale well for servers," said Martin Reynolds, vice president and research fellow with Gartner Inc. "It is definitely possible to build an ARM chip optimized for servers, but it requires considerable investment in design techniques, with limited payoff."

The biggest hurdle has been matching the performance per dollar and per watt of Intel's chips, industry watchers say.

Another issue: Software coded for Intel-style processors must be reworked to run on the ARM architecture. That is likely a deal breaker for corporate customers but less of a barrier for large cloud-computing providers such as Microsoft, since they build their own data-center software and run it on immense numbers of computers.

That scale makes it "more economically feasible to optimize the hardware to the [computing] workload instead of the other way around," Microsoft said in its blog post, even if that means switching from Intel to ARM-based chips.

In a separate blog post, Microsoft said it had struck separate design partnerships with AMD, Intel, and Nvidia Corp. Qualcomm also is working with Red Hat Inc. and Canonical Ltd. to adapt the Linux operating system to run on its chips.

Jay Greene contributed to this article.

Write to Ted Greenwald at Ted.Greenwald@wsj.com

(END) Dow Jones Newswires

March 08, 2017 09:29 ET (14:29 GMT)

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