Microsoft Says Fix for Intel Chips May Degrade Server Performance

By Paul Ausick Updated Jan 12, 4:39AM EST · Published Jan 9, 1:45PM EST

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Microsoft Says Fix for Intel Chips May Degrade Server Performance — © Thinkstock

Fixing the flaws in Intel Corp. (NASDAQ: INTC) processors that were revealed last week may take a heavier toll on the chip’s performance than Intel has suggested. On Tuesday, Microsoft Corp. (NASDAQ: MSFT) said that fixing the security holes — known as Meltdown and Spectre — in the processors may “significantly” slow down the performance of certain servers and some personal computers (PCs).

According to a blog post at Microsoft, PCs sold since 2016 and running Microsoft’s Windows 10 operating system may encounter slowdowns of up to 10%, a decline Microsoft said would probably not be noticeable to users. Users of older PCs may notice a speed deficiency primarily due to the age of the processor. For users with old machines running earlier versions of Windows, a noticeable slowdown is likely.

Microsoft expects the most noticeable performance decline to affect corporate data centers and servers:

Windows Server on any [processor], especially in any [input/output]-intensive application, shows a more significant performance impact when you enable the mitigations to isolate untrusted code within a Windows Server instance. This is why you want to be careful to evaluate the risk of untrusted code for each Windows Server instance, and balance the security versus performance tradeoff for your environment.

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Customers of Microsoft’s Azure cloud service are likely to see no noticeable effects from the fixes the company has installed to patch the holes.

Corporate customers may have to choose between installing Microsoft’s fixes or taking the performance hit that installing those fixes will mean. That is certain to irritate some customers more than others. Those who choose to install the fixes and then have to buy more servers to get their performance back to where it once was are likely to be particularly unhappy.

Intel is going to take the biggest hit from this fiasco, but Microsoft may not be able to escape some collateral damage as well. There are sure to be enough enraged WinTel customers to go around before this episode is over.

Intel stock traded down 1.3% early Tuesday afternoon, at $44.15 in a 52-week range of $33.23 to $47.64.

Microsoft traded up about 0.3% at $88.59 a share, in a 52-week range of $61.95 to 88.70. The high was posted earlier today.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.