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The emergence of new classes of mobile devices such as tablets and cloudbooks has created two important stand-offs - between Windows and Linux, especially Android; and between Intel's x86 processor architecture and ARM's. The waters muddied considerably when Intel targeted its Atom low power platform at Linux as well as its traditional ally Microsoft, even creating its own Linux-based OS with Nokia, MeeGo. That still left Microsoft largely tied to Intel processors, but with declining influence over them - and the Windows giant has hit back at last, signing up for a broad-ranging architectural license with ARM.

This not only allows Microsoft to use ARM-based processors in its commercial products and reference designs, but to design its own ARM-based chips and tweak the core architecture. Only a few firms hold these architectural licenses, including Qualcomm, Apple and Marvell. The agreement shows that Microsoft knows it needs to extend the target base for its operating systems - Windows 7 (widely installed on netbooks), but particularly its mobile and embedded systems, Windows Phone 7 and Windows Embedded. In particular, it needs to take account of the installed advantage that ARM has in the mobile devices segment, because of its dominance of the cellphone sector and its low power consumption. While Atom's first phone-oriented release, Moorestown, promises to match ARM power levels, this has yet to be commercially proved.

ARM and Microsoft have worked together since 1997 on software and devices for embedded, consumer and mobile applications, and of course, most Windows Mobile and Windows CE devices are ARM-based. But this is a significant and disruptive extension of that agreement, and could bring Windows 7 to the ARM world too. The new agreement could allow Microsoft to create its own ARM-based designs optimized for its own OSs and media platforms, and for devices like the Xbox games console. Microsoft is also relying heavily on reference designs for the upcoming WP7 smartphones, partly to reduce cost and time to market for vendors in emerging markets, but also confining established partners like HTC to three well controlled chassis options.

There may also be a server-oriented aspect to this new deal, since for the first time, ARM-based processors may challenge x86 in the data center, with several firms creating low power processors geared to cloud servers. Microsoft is known to have been looking at using ARM hardware in its Bing data centers, says EETimes.

"Microsoft is an important member of the ARM ecosystem, and has been for many years," said Mike Muller, CTO of ARM, in a statement. "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."

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