Reading the Technology Tea Leaves

I enjoy Robert X. Cringely's ability to look into the murky waters of technology competition and to annoint the winners. Is he always right? No. But he is fairly prescient and even when he is wrong he has a good reason for seeing a different future.

Here's his prognostication for the Intel-Microsoft duopoly:

Intel last week bought for $884 million Wind River Systems, a venerable embedded operating system company — yet another of the chip giant’s recent forays into software. The reason for this purchase is both simple and grand — to help Intel vertically integrate and to further its Linux ambitions. Intel’s ultimate target with this purchase is Microsoft. It’s all about kicking Redmond out of the netbook business.

Netbooks are the big hardware success of 2009 and most are powered by Intel Atom processors. The problem with PC’s in general and netbooks in particular is that they aren’t very profitable for Intel campared to the good old days. Microsoft makes more profit from every Windows PC sold than does the PC manufacturer and LOTS more profit than Intel makes despite its massively dominant market share in microprocessors. And with Netbooks retailing under $400, compared to Microsoft Intel makes hardly any profit at all. So Microsoft has to die.

This is a huge change for Intel, which has for decades acted as Microsoft’s bitch, doing pretty much whatever Redmond demanded for fear of being written-out of the next Windows PC hardware spec in favor of AMD or even IBM. But that was the old Microsoft. The Microsoft of today isn’t nearly as powerful, whether they yet know it or not.

...

Moblin is Intel’s answer to Windows – an Open Source Linux entirely funded by Intel.

Moblin is also Intel’s answer to Google’s Android operating system. Since Android is also Open Source and free, Intel might have relied solely on Google to take on Microsoft. But Intel as a platform company is too strategic to rely on any third party, even Google — hence Moblin.

The Wind River acquisition is Intel’s $884 million acknowledgement both that Moblin is strategic for the company AND that the Linux campaign isn’t going as well as Intel would like. Wind River, as a major force in embedded software, will quickly move Moblin into a variety of non-PC devices while also giving Intel more of the low-level software expertise that it has so sorely needed. If it works, we’ll see Moblin everywhere in 18-24 months. If it works really well, we’ll see Intel challenging Microsoft on servers and desktops, too.

Intel CEO Paul Otellini is determined not to be anybody’s bitch.