Why Microsoft acquired an ARM license

.
Little British chippie ARM boasts hundreds of licensee’s for its technology – found in over 98% of the world’s smartphones – but the firm seems to have landed a very big fish indeed with Microsoft announcing on Friday it had signed up for an ARM architectural license of its own.

A press release put out by both firms said “the agreement extends the collaborative relationship between the two companies,” which apparently reaches back some 13 years. “Microsoft and ARM have worked together on software and devices across the embedded, consumer and mobile spaces,” the release continues.
Microsoft didn’t specify what it had planned for its new ARM license, except to say “With closer access to the ARM technology we will be able to enhance our research and development activities for ARM-based products.”
ARM’s CTO, Mike Muller, was even more vague, waffling that “with this architecture license, Microsoft will be at the forefront of applying and working with ARM technology in concert with a broad range of businesses addressing multiple application areas.” Whatever that means.
It could mean that Microsoft will be able to better optimize its Windows Embedded products for upcoming Windows phones, or it could mean that Microsoft wants to go the Apple route in building its very own microprocessors.
Analyst Nathan Brookwood from Insight 64, however, says such a deal wouldn’t be necessary for Redmond to follow the Cupertino processor path.
“Most companies that create chips with embedded ARM cores just license the core technology from ARM, and then augment the ARM core with other on-chip facilities, the way Apple did with the A4 processor it uses in its iPhone4 and iPad. You don’t need an ARM license to do that,” he told Unplugged.
Brookwood went on to tell us that only a few companies – like Qualcomm and Marvell – have architectural licenses that let them design proprietary cores compatible with ARM. But that’s no picnic, either.
“Doing a design at this level takes lots of $$$, two to three calendar years and at least one hundred man-years of effort,” he said adding, “When you’re done, it’s not clear you will have a better mousetrap than the one you could have licensed from ARM for a few pennies per copy.”
And while Microsoft certainly has the cash to spend Brookwood finds it unlikely the firm has the time, especially “given their struggles of late with smart phones and music players.”
Fellow analyst Rob Enderle of the Enderle group agrees that getting devices on shelves quickly is likely a strong motivation for Microsoft.
“This is likely less about Intel than it is about addressing Microsoft’s own time to market and quality difficulties with the Windows Phone platform,” he told Unplugged. “Microsoft has to be able to keep up with Apple and to do that it may have to have more control over the hardware side of its solution,” he added.
Indeed, Enderle notes, Apple took an ARM license out in order to both better control costs and to shorten its time to market while Google has moved to a hard ARM specification largely in order to better assure quality.
Interestingly, Enderle also told us the move will likely impact Microsoft’s internal project to put low cost processors in the data center, “kind of like RAID but with processors, which started with Atom but is rumored to have shifted to ARM after a dispute with Intel.”
Meanwhile Jack Gold commented that the move opened up “lots of possibilities,” not least of which would be strengthening Microsoft’s large embedded business.
“Further, with the increase in ARM’s processing power, it could be a factor in their games (Xbox business),” he added.
On the mobile side, however, though Gold does see plenty of room for WP7 phones and WinCE tablets running on ARM chips, he doesn’t expect the Redmond giant to port Windows to ARM anytime soon “as this would be a major effort.”
As for designing its own custom chips, Gold says there is no reason this couldn’t occur at some point in the future, but that it’s “less likely” because device manufacturers will want to have some leeway in selecting their own chips within some minimum spec window.”
Details of the agreement are apparently highly confidential and a Microsoft spokeswoman told Unplugged she could and would not elaborate any further than the press release.