This quote from Morgan Stanley shows a threat to Intel's strongest business

Intel owns over 95% of the data center market, but some customers want more choice.

According to IDG News, Morgan Stanley is one of the latest companies to test ARM-based chips for its data centers.

"They ran a very relevant columnar database benchmark for us and got a 5x performance improvement per rack compared to an Intel Haswell EP solution," Morgan Stanley's VP of technology business development Bert Shen said at the ARM TechCon conference last week.

But Shen added the decision to test ARM-based chips wasn't just based on performance, but also to reduce its relaince on one dominant vendor.

"For large enterprises, ideally you have two vendors for a product line. You try to avoid three vendors unless it's a commoditized product. But when there's one vendor, you basically run like hell," he said.

Although it's still at the proof-of-concept level, this could show a looming vulnerability in Intel's data center business, which has been its main growth driver as PC sales have slowed down.

The report added that ARM is hoping to take 25% of the data center market by 2020. Intel, on the other hand, forecasts its data center business to continue to grow at a 15% compound annual growth rate. Last quarter alone, Intel's Data Center Group booked $4.1 billion in revenue.

Morgan Stanley isn't the first major customer to try ARM-based chips in its data centers. Earlier this year, PayPal said it's a happy customer of ARM's server chips and that it's only "one of the many hyperscale data center customers" using ARM-based chips in data centers.

Jim McGregor, principal analyst at Tirias Research, told us in a previous interview that Intel has been raising the price of its server chips, which has upset some customers and made them consider other options.

"That's not a position you want to be in. That opens the door for competition," McGregor said.