On October 25^th, ARM, Red Hat and Applied Micro announced a partnership to develop a disruptive 64-bit server platform for datacenters and enterprises. This announcement came on the heels of other recent announcements from Calxeda and Dell, and is expected to be followed next week by one from AMD. ARM is the dominant architecture in smartphones, and as expected, following ARM’s unveiling of its 64-bit v8 architecture in Oct’11, the first products to leverage this architecture have been the iPhone 5 and the Samsung Galaxy (starting early 2013). Now, these recent partnerships with Red Hat, AMD and others could help ARM penetrate the server market that Intel x86 currently dominates.

So what does this mean for Intel? Intel’s multiple advantages in the server processor space – a universally accepted WinTel configuration, advanced chip processing capabilities from its in-house fabs, and limited competition from AMD – are all being challenged due to the increasing demand for low-power server processors, and ARM is leading this challenge. While Windows seems to still be the pre-dominant OS in datacenters, ARM’s new partner Linux is currently an able number two (Windows is opening up to ARM itself as well). On the fab side, TSMC is strengthening its partnership with ARM to help them leverage the most advanced chip processing nodes. Finally, by getting players like AMD and Red Hat into its camp, ARM has built a strong coalition in the compute processor ecosystem.

Unlike traditional competitors like AMD, what Intel is facing here is more of a partner ecosystem. Vertically integrated product offerings have not been too successful in recent days, and so maybe now ARM is up for its time in the sun at Intel’s expense.