Inside Intel, It's XP

Intel appears to be sticking with Microsoft's Windows XP operating system for most of its 80,000 employees until the next release of the OS, code-named Windows 7, is released, perhaps in 2010.

"We're in a refresh cycle now and there are a number of factors considered before we select software," an Intel spokesman told Reuters. "We are testing and deploying Windows Vista in certain departments."

Intel and Microsoft have had a close relationship for many years, with the industry fashioning the phrase "Wintel" to describe PCs that work on Intel processor's and Microsoft's software.

But Intel's inaction regarding Vista is likely to be seen as an embarrassment for Microsoft. A source close to Intel told The New York TImes that the company "found no compelling case for adopting Vista."

Intel, of course, is not alone. Microsoft's latest OS, released worldwide last January, has been somewhat of a dud commercially. In April, Microsoft said it had sold more than 140 million Vista licenses, but many businesses have delayed upgrading to Vista, which requires higher-end and more expensive hardware components to reach its potential efficiencies.

Many solution providers have said they've ripped Vista out of new PCs and "downgraded" to XP, which was released in 2001. Just last week, Dell delayed its self-imposed deadline for selling PCs preloaded with XP until yesterday from earlier in the month.