Report: Microsoft Wants Lower Power 16-Core Server Chips From Intel, AMD

The advent of new mobile product categories may test the power partnership between Microsoft and Intel, but recently both companies have turned to publically requesting innovation from the other in order to maintain it.

A report from IDG News Service cited a Microsoft executive saying Microsoft has asked Intel to create a 16-core Atom chip for servers to reduce power consumption in data centers. The software giant made a similar request to AMD, according to the report.

Dileep Bhandarkar, an engineer with Microsoft's Global Foundation Service, reportedly spoke at The Linley Group Data Center Conference in Silicon Valley regarding a possible shift toward ARM Holdings' processors if they allow Microsoft to cut power requirements in data centers.

Bhandarkar touted the opportunity that smaller designs and chips with low-power requirements represent. He reportedly mentioned both Intel and rival AMD, namely AMD's "Bobcat" core architecture on which several small form-factor AMD Fusion integrated graphics chips are based.

The microprocessor market received a shakeup recently when Microsoft announced at CES 2011 earlier that it intended to make the next Windows release compatible with ARM's technology , which has seen tremendous growth on mobile devices such as smartphones and tablets. In addition, ARM announced that it will be teaming with partners such as Nvidia to produce low power server and PC chips to compete with Intel. ARM President Tudor Brown recently spoke with CRN and said that his company can offer a cheaper, more energy efficient server chip than Intel.

Meanwhile, the releationship between Microsoft and Intel has grown more complicated in recent weeks. Microsoft's request that Intel produce low-power chips for a specific market follows comments from Intel 's CEO Paul Otellini last week on the possibility of bringing low-power chips based on Intel's x86 architecture to Windows 8 smartphones.

"We have the ability to put our lowest-power Intel processors running Windows 8, or 'next-generation Windows,' into phones, because it’s the same OS stack," Otellini said. "I look at that as an upside opportunity for us."

At the time, Intel's request was widely interpreted as a response to Microsoft's decision to port Windows to ARM processors, and as another indication of tense relations between Microsoft and Intel.

NEXT: Intel's Efforts In Mobile

Also at CES, Intel further undercut Microsoft by announcing it will support Android's platform for mobile devices. The move also allowed Intel to compete aggressively with ARM by challenging the British chip design firm's niche market. The Android 3.0 platform equipped with ARM's Cortex architecture was unveiled at the event, running devices such as Motorola 's new Xoom tablet.

Intel demonstrated its interest in the burgeoning tablet and smartphone markets last year. In December Intel formed a Netbook and Tablet Group aimed at driving its strategy in the mobile space. Intel also acquired Infineon Wireless Solutions in August, a division of Infineon whose technology is featured inside Apple's highly successful iPhone and IPod mobile devices.

Intel has also sought to move into new areas of the market in recent month, acquiring storage vendor McAfee in August and launching a new specification for Intel's digital signage solutions in October.

Meanwhile, Microsoft is seeking a new direction in the server space. Earlier this month, the president of Microsoft's Server and Tools Business (STB), Bob Muglia, left Microsoft after CEO Steve Ballmer disclosed plans to shake up the company's STB operation.

’The best time to think about change is when you are in a position of strength," Balmer wrote in an e-mail regarding Muglia's departure. "And that’s where we are today with STB – leading the server business, successful with our developer tools, and poised to lead the rapidly emerging cloud future."