Wintel (A) : Cooperation or

Conflict

Nikhil Gupta
10FN-121
Suraj Jain
10DM-163
Shweta Arora
10DM-150
Srikanth Konduri 10FN-109

1. Key drivers of profitability

: Intel
Largest company in micro processor market
Brand recognition: Intel Inside
Rapid Innovation : Moores law, New
releases every 18 months, far ahead of
competitors
Complementary relationship with Microsoft
R & D : Intel Architecture Lab(IAL)
Investment arm : Intel Capital
Low marketing expense

2. Key drivers of profitability : Microsoft

Highest market share in the OS
market
High rate of growth in sales
High barrier to entry of competitors
Brand recognition
Low cost for development of
applications
High cost of marketing

3a. Areas of Conflict

Conflict arises when the products are incompatible.

Microsoft believes Intel is trying to infringe into its territory.
Difference in time and resource allocation for new product
development.
Different style and philosophy of working.
Intel has a substantial investment (time and resources) in
NSP.
As NSP was created for Windows 3.1, there would be
significant compatibility issues with the upcoming Windows
95.
NSP allows competitors to create multimedia products that
would run on Microsoft OS.
Intel originally pitched NSP to software vendors
independently of Microsoft, allowing Microsofts competitors
to enter the multimedia market immediately.

3b. Areas of Cooperation

Complementary relationship between Intel and
Microsoft to this point.
OS and software applications built specifically for
Intel-powered machines.
Intels chip architecture supports Microsofts OS
only.
New product development. (keeping in view
interest of both parties)
Increasing the size of the pie by making
computing easier and affordable.

4. Intels Choices

Alternatives

Pros

Cons

Cave in to Bill Gates and

stop the release of NSP
altogether.
Work with
Microsoft
to
develop
future
multimedia
strategy

Both Intel and Microsoft

enjoy stable market share
an the strategy may
reduce risk exposure of
both
Ensure
future
cooperation
between
Intel Microsoft.
Microsoft
has
huge
amounts of cash and
reserves
which
could
come handy for research

Intel will lose four years

worth of investment on
NSP
May lead to lack of
confidence from all the
stakeholders

Lose

Hold My grounds

Save Face in front of

stakeholders

Even
if
Microsoft
decides to cooperate, the
compatibility issues will
hurt both the companies
In case Microsoft doesnt
give in , the battle will
continue and scope for
any further cooperation
would be ended
Might give a boost to
Intels competitors like
AMD, since Microsoft may
decide to support AMD
processor
through
its
software

Loose

May not be easy to

convince Bill Gates
Depending on terms of
the
compromise,
Intel
may require to incur
losses in terms of time
and money

Win

Try
to
Negotiate
Compromise

a
Ensure
resolution
of
conflict and room for
continued cooperation
Microsoft with its extra
cash reserves might be
encouraged to invest in
R&D
for
resolving

Win/Lose

5. Intels view of possible

Microsofts Choices

Alternatives

Pros

Cons

Chances

Cave in to Andy
Grove and delay the
launch of Windows
95 until NSP is
compatible with it,
allow NSP to be
released
on
schedule.

Can
defer
its
release of Windows
95 by 18 months
and increase the
sales
of
its
Windows
3.0
till
then.

Microsoft will loose

profits from those
manufacturers who
have
already
embedded new OS
in their upcoming
releases.

Chances of such a
change of heart by
Microsoft are very
slim.

Lose

Hold My grounds

Save Face in front

of industry players

Even if
Microsoft
decides
to
cooperate,
the
compatibility issues
will hurt both the
companies
In case Microsoft
doesnt give in , the
battle will continue
and scope for any
further cooperation
would be ended
Might give a boost
to
Intels
competitors
like
AMD,
since
Microsoft
may
decide to support
AMD
processor
through
its
software

As this option might

result in a loss of all
future partnership
opportunities
between
them,
chances of adopting
this is quite low.

Loose

Would view it as
Intels foray into
Microsofts
core
competent area.

Its quite difficult to

convince Gates on
this proposition, as
Intel
needs
to
convince him for
investing
in
the
development of new

Win

Try to Negotiate a
Compromise

NSP
can
be
released 18 months
later,
with
compatibility
to
Windows95, which
can be introduced

Win/Lose

What Actually Happened?

Only the hardware initiatives of Intel
Architecture Labs (IAL) have taken off
Software initiatives of IAL have been
dampened by Microsofts muscle, as they
were colliding with the laters activities
IAL was disbanded in 2001 after its initial
talent was left and replaced by Intel Labs