A Network of Friends and Enemies: Microsoft and Intel’s (Wintel) Alliance
In the past few decades, computers have become mainstream within the world. They are found in homes and are nearly ubiquitous in businesses. They can connect to each other and to a common network. But what allows them to work so well with each other when there are so many different brands making them? One main aspect these computers have in common is that many of them use Microsoft’s Windows operating system and Intel’s processor.
For a long time, Microsoft and Intel have had a friendly relationship where they would promote each other’s products. They had a strong tie or alliance with each other while other companies such as HP, Dell, and Sony had to trade with this strong duo. We can imagine this network as a simple three-node network where Microsoft and Intel (Wintel) represent a single node in the center, a group of companies (A) as a node attached from the left, and another group of companies (B) as a node attached from the right. Since both A and B are only connected to Wintel, they cannot bargain with each other and make Wintel negotiate more favorable terms. In this three-node network, Wintel has the most power and can force both A and B into its own terms by threatening to cut off and not work with them.
Recently, however, the Wintel Alliance has weakened. As seen in the article linked, Microsoft caused a rift between itself and Intel by announcing a version of Windows that runs on an ARM processor and revealing its Surface tablets. What Microsoft did in a simplified interpretation is promote Intel’s competitor and lock out Intel from its plans. In essence, Microsoft made a friendly tie with a previous enemy and started to cut off Intel. Now we can imagine in an extreme case two networks that are tied by a local bridge between Microsoft and Intel. As Microsoft and Intel become more and more unfriendly, we can see a group of friends and enemies forming for Microsoft and for Intel. We can also imagine a network of four nodes. Microsoft and Intel can be the center two nodes with group A branching off from Microsoft and group B branching off from Intel. In this situation, Microsoft and Intel have less power than before because they must share it with each other. Since they are less powerful, both groups A and B can exert more terms than before.
Microsoft and Intel need each other, at least for now. As the linked article suggests, Microsoft and Intel are stronger when they work together than when they try to separate and find replacements for one another. They both are the dominant forces for one of the two key technologies in the computing industry: the operating system and the processor. We can only imagine how this complicated network might unfold in the future.
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