Lots of interesting developments in the evolving Microsoft – Intel relationship. In the past the WinTel dominance was widely acknowledged, with PC refreshes every 3 years or so driving profits at both firms. Now fast forward to 2012.

Intel is facing fierce competition from ARM, whose historical strength in cell phones and handheld/smartphone/tablet devices now presents a major competitive threat against Intel’s PC franchise.

Microsoft faces perhaps greater challenges in its client business, as the PC industry is stagnant while Apple and Google dominate the cellphone and tablet markets.

One highly-publicized joint initiative – Intel-powered Ultrabooks running Windows 7, competing against the AirBook and offering both tablet and laptop functionality – had very low sales. But it could get worse for this great product (I use one…) According to Angelbeat attendees, they are unlikely to buy ultrabooks in the future, preferring now to wait for Microsoft Surface Tablet this Christmas season. And according to press releases the first wave of Surface devices will likely be powered by ARM devices, with Intel Surface tablets to follow.

IT Professionals do need to keep this in perspective. WinTel-powered PC’s are still the dominant form of client computing, while Intel-powered hardware running Windows Server and other Microsoft data center/infrastructure products are growing rapidly. So Microsoft and Intel are still very much joined at the hip, with complementary and synergistic offerings, plus many new products planned against their growing and often common rivals.

But the world is changing and IT professionals now have several hardware and software options for replacing their enterprise-grade, WinTel-powered laptops/PC’s after 3-4-5 years. And of course there is always VDI/thin client/virtual desktop deployments too.  From an end user viewpoint, this will require much more upfront planning and study – the decision is no longer a simple upgrade – but the end result should be better performance at lower cost.