Unfortunate business decisions are made every, but rarely do we get insight in the background of those decisions and answers to the when? why? and who? questions. New court documents relating to the Vista marketing confusion that flooded the PC market with ???Vista Capable??? computer systems that were not really able to run Windows Vista and support Vista??™s new driver model, reveal more about what was discussed between Microsoft, PC vendors and Intel. There seems to be no doubt that Microsoft knew a decision to allow certain Intel systems to sneak into the Vista Capable program may mislead its customers and yet the company followed through with that strategy. Guess why.
A new 29-page filing made available through TechFlash, which follows a 158-page filing that was published in February, raises new concerns over PC buyers who were intentionally misled with Vista logos that were placed on PCs in 2006. As in the previous filing, the attorneys of the plaintiffs list plenty of emails that discuss support for the Windows Display Driver Model (WDDM) as a requirement for PCs to carry the Vista Capable/Ready logo prior to the launch of the new operating system as well as Microsoft??™s knowledge that computers equipped with the Intel i915 GM IGC do not meet this requirement and were, as a result, generally considered not to be capable enough to run Windows Vista.
The problem was that especially because Intel held a 40%+ market share of the PC graphics market with its IGCs at the beginning of 2006, less than 30% of PCs at the time were considered to be able to run Windows Vista. Of course, that created a huge problem and the prospect of lots of PCs being stuck in the channel with consumers unwilling to buy them. And it was clear that Intel would be unhappy. Not surprisingly, the company complained about the WDDM requirement and asked Microsoft to temporarily drop this clause.
The filing leads up to an email conversation between Microsoft and Intel executives on January 30, 2006, a communication which apparently had already reached the very top of both companies by that date, that resulted in Microsoft dropping the WDDM requirement on January 31, 2006. Intel was happy and was able to ship millions of suddenly ???Vista Capable??? systems into the market (by that time, Vista Capable meant that a PC would be able to run Vista without the AeroGlass surface), an exposure that was estimated at about $200 million per month, according to the filing.
The decision was greeted with enthusiasm by Sony (which had invested in the 915 chipset), confusion (Dell, which described the new strategy as ???clear as mud???) and anger (HP, which had invested in higher-end graphics systems to prepare for Vista). Microsoft??™s internal reaction reflected previous communication ??“ emails of several employees and executives quoted in the filing described the decision, which, as it appears, was mainly carried by corporate vice president Will Poole (left Microsoft in September 2008) as wrong with the potential impact of misleading customers.
Microsoft reinstated the WDDM requirement on January 30, 2007, the launch day of Vista.
The obvious question is why Microsoft gave in to Intel??™s complaint and graciously enabled the chip company to get rid of its 915-based supply. An email sent from Steve Ballmer to then Windows-in-charge-executive Jim Allchin stating that Poole should be brought ???under control??? indicates that Poole in fact may have made the decision to get the 915 chipset into the fold. While it remains to be seen what the outcome of this class action lawsuit will be, the reasons seem to be clear, if the claims made in the filing are true. Company interests, not consumer interests, were protected. The WDDM requirement drop helped Intel to avoid a potentially huge loss and helped Microsoft to sell many more Windows licenses on PCs with Vista logos than it would have been able to do otherwise.
There was a lot of money at stake and Microsoft in the end made a decision that helped Intel the most. However, common sense suggests that Microsoft??™s benefit may have been very limited. This looks like a textbook case of shooting yourself in the foot, especially if Microsoft gets stuck with the bill.
Source: TG Daily