Software // Operating Systems
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11/17/2008
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Vista Capable Fiasco 'Destroyed' Microsoft's Credibility, Insider E-Mails Say

The software maker's decision to ease hardware requirements also angered some partners, including HP.

Microsoft's late-inning changes to the definition of a Vista Capable personal computer "destroyed" the company's credibility with hardware makers like Hewlett-Packard, which invested heavily in components designed to meet the original definition, according to e-mails filed as evidence in a consumer lawsuit against Microsoft.

The e-mails, unsealed last week, reveal concerns by Microsoft insiders and outsiders that the company eased the specifications for a Vista Capable PC prior to Vista's debut in early 2007 in order satisfy chipmaker Intel, which was laden with a large inventory of graphics components that did not meet the original requirements for Vista.

That didn't sit well with HP, which developed two motherboards specifically for the then-new operating system.

"The decision you have made and communicated has taken away an investment we made consciously for competitive advantage knowing that some players would choose not to make the same level of investment as we did in supporting your program requirements," HP consumer PC executive Richard Walker wrote in an e-mail to former Microsoft co-presidents Jim Allchin and Kevin Johnson, dated Feb. 1, 2006.

"I can't be more clear than to say you not only let us down by reneging on your commitment to stand behind the WDDM [Windows Display Driver Model] requirement, you have demonstrated a complete lack of commitment to HP as a strategic partner and cost us a lot of money in the process," wrote Walker.

In an e-mail to Microsoft CEO Steve Ballmer, Allchin called the situation "a mess."

"Now we have an upset partner, Microsoft destroyed credibility, as well as my own credibility shot," wrote Allchin. For his part, Ballmer appeared unwilling to accept any blame for the problems. "I had nothing to do with this," Ballmer wrote in an e-mail to Allchin and Johnson. "I am not even in the detail of the issues."

E-mails released earlier in the case indicated that Microsoft made the change so that Intel, a longtime Microsoft partner, could meet its quarterly earnings goals in 2006.

"In the end, we lowered the requirement to help Intel make their quarterly earnings so they could continue to sell motherboards with 915 graphics embedded," wrote John Kalkman, a Microsoft general manager, in one e-mail.

The e-mail was dated Feb. 26, 2007 -- about one month after Vista debuted on the market.

The Intel 915 graphics chipset is a PC component that boosts a system's ability to display multimedia effects. However, it lacks the necessary features to support Vista's 3-D Aero interface.

The e-mails have been entered into evidence in a class-action lawsuit that accuses Microsoft of deceptive marketing practices. The plaintiffs contend that Microsoft intentionally duped customers by advertising as Vista Capable computers that lacked the horsepower to run all of the operating system's features.

The Vista Capable campaign was meant to assure PC buyers who bought systems prior to Vista's launch that they would be able to upgrade their machines to the new OS when it became available.

In another e-mail, Microsoft Windows product manager Mike Nash said even he was fooled by the campaign: "I personally got burned by the Intel 915 chipset issue on a laptop that I personally" bought "with my own $$$." Nash said he purchased the Sony laptop "because it had the Vista logo and was pretty disappointed."

"I now have a $2,100 e-mail machine," Nash complained.

An e-mail from Microsoft senior VP Steven Sinofsky to Ballmer revealed that Sinofsky had deep concerns about the Intel 915 chipset's ability to run any version of Vista. "The 915 chipset which is not Aero capable is in a huge number of laptops and was tagged as 'Vista Capable' but not Vista Premium. I don't know if this was a good call," wrote Sinofsky.

In a letter to Allchin, one manager blasted the company's decision to alter the definition of Vista Capable to suit Intel. "We are caving to Intel," said Mike Ybarra. "We worked hard for the last 18 months to drive the UI experience and we are giving this up."

In their initial complaint, consumers Dianne Kelley and Kenneth Hansen claimed they were the victims of "bait and switch" sales tactics by Microsoft and filed a lawsuit against the software maker last March in federal court in Washington state. A judge earlier this year granted the case class-action status.

For its part, Microsoft has argued that it did not deceive consumers because the Vista Capable campaign distinguished between PCs that could run the basic version of the OS and those able to run the premium version.

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