ARM and Microsoft Corp. on Friday today announced that they have signed a new licensing agreement for the ARM architecture. While formally the agreement extends the collaborative relationship between the two companies, it may play a role for the whole industry that is hard to overestimate.

Since 1997 Microsoft and ARM have worked together on software and devices across the embedded, consumer and mobile spaces, enabling many companies to deliver user experiences on a broad portfolio of ARM-based products. In particularly, Microsoft developed operating systems, including Windows Embedded, Windows CE, Windows Mobile and Windows Phone that could run on ARM-based microprocessors or system-on-chips. This time, however, Microsoft licenses ARM architecture and gets closer access to ARM's intellectual property (IP), which will enable the software giant to develop its own chips based on ARM's IP.

Microsoft itself quietly announced formation of its chip design group back in 2006. So far the design group seem to have worked only on various chips for Microsoft Xbox 360 console, in particular, they shrunk them in sizes and created single-chip CPU-GPU code-named Valhalla system-on-chip (which combined IBM Xenon processor with ATI Xenos graphics and memory controller). For its own Zune HD player and Kin phone Microsoft decided to use Nvidia Corp.'s Tegra processor. Thanks to the new license, the company will be able to create its own SoCs for a wide range of own-brand or third party devices.

But the most intriguing question is whether Microsoft will enable traditional Windows to work on ARM-based personal computers, whether those are tablets, smartbooks, low-power desktops or even some types of consumer electronics (e.g., television sets). Enablement of Windows on ARM-based processors may become a game changer for the whole industry and has all chances to become a massive blow to emerging operating systems, such as Google Android, Google Chrome or Linux.

“ARM is an important partner for Microsoft and we deliver multiple operating systems on the company’s architecture, most notably Windows Embedded and Windows Phone. With closer access to the ARM technology we will be able to enhance our research and development activities for ARM-based products,” said KD Hallman, a general manager at Microsoft.

ARM licenses processor IP under a flexible licensing model, enabling highly integrated solutions for a variety of applications ranging from mobile devices to home electronics and industrial products. ARM customers can license the ARM architecture or specific processor implementations. Details of the agreement will remain confidential.

Tags: Microsoft, Windows, Cortex