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Vista: How cozy were Microsoft and Intel?

As reported here yesterday, one of the most eye-catching elements of the newly disclosed internal Microsoft e-mails on Windows Vista was an e-mail from Microsoft's John Kalkman to Scott Di Valerio, then in charge of the company's relations with PC makers.

Read the full text of the Microsoft e-mails:
PDF, 158 pages.

In the February 2007 message, Kalkman explained why the company lowered the requirements for a PC to qualify for the "Windows Vista Capable" designation, to include hardware that didn't support the new operating system's advanced graphics.

An excerpt:

In the end, we lowered the requirement to help Intel make their quarterly earnings so they could continue to sell motherboards with the 915 graphics embedded. This in turn did two things: 1. Decreased focus of OEMs planning and shipping higher end graphics for Vista-ready programs and 2. Reduced the focus by IHV's to ready great WHQL [Windows Hardware Quality Labs] qualified graphics drivers. We can see this today with Intel's inability to ship a compelling full featured 945 graphics driver for Windows Vista.

The notion of Microsoft making the decision specifically to help Intel's quarterly results is drawing some attention in the industry today. Among other things, securities laws regulate selective financial disclosures.

"We don't know who John Kalkman is," said Intel spokesman Chuck Mulloy this afternooon. "We do know he's not qualified to know anything about internal Intel financials or forecasts related to chipsets, motherboards or any other products." Mulloy said Kalkman "would have no visibility into our financial needs in any given quarter."

Such an arrangement between Microsoft and Intel would be "questionable, at best," said PC industry analyst Roger Kay of Endpoint Technologies Associates. "A company typically isn't supposed to make as an objective that it helps another company with its earnings unless there's an ownership relationship there. ... If helping Intel helps Microsoft then it could be justified but on the face of it, it sounds a little funny. Why would they be helping Intel unless there's some other quid pro quo that's not in the e-mail?"

Doug Freedman, an analyst for American Technology Research, was less concerned. "There's always a push and pull between hardware and software," Freedman said. "Any new product that's introduced almost always has some sort of user experience compromise incorporated into it, whether it's to reach a price point or whether it's to reach a time-to-market goal."

Theoretically, Microsoft may have benefited if more PCs were seen as capable of running Vista. At the same time, the internal e-mails show that the decision to lower the "Windows Vista Capable" requirements caused consternation within Microsoft, by including machines that couldn't run the new operating system's advanced graphics. It also created friction between the company and partners such as Hewlett-Packard and Wal-Mart.

"We really botched this," wrote Jim Allchin, then Microsoft's Windows chief, in a February 2006 message.

Responded Microsoft's Mike Ybarra: "We are caving to Intel."

In following up on this issue today, I'm talking with experts about the legal implications, and I'll be posting more depending on what I find out. I've also asked a Microsoft representative if the company wants to comment on this specific aspect of the e-mails.

Posted by at February 28, 2008 3:11 p.m.
Categories: , ,
Comments
#102954

Posted by Will in Seattle at 2/28/08 4:25 p.m.

Hoist by their own electronic petard.

#103051

Posted by unregistered user at 2/28/08 10:09 p.m.

Forget sinking - one wonders whether the ship has already sunk, and much like Iraq or a recession, by the time the problem's identified it's already too late.

Like "A people" hire B people, "D companies" acquire C companies. Yahoo circa 2008 is a C company.

All MS had to do was release an iterative XP (SP+1) and call it Vista. That they overpromised, underdelivered, lied to themselves, and then expected the rest of the world to believe those same lies and buy it says how little is left.

#103092

Posted by unregistered user at 2/29/08 4:03 a.m.

Good picks, Todd.

#103100

Posted by unregistered user at 2/29/08 5:52 a.m.

Windows is already depreciated and living on a support air supply.

R.I.P. Windows

Linux all the way !! Yaa !!

#103105

Posted by unregistered user at 2/29/08 6:33 a.m.

Microsoft -- linux hardware drivers ??????

#103107

Posted by unregistered user at 2/29/08 6:34 a.m.

I guess someone at Microsoft forgot about their 90 email retention policy.

#103123

Posted by unregistered user at 2/29/08 8:07 a.m.

When a company reaches the point of sloppiness in their shady business where they start communicating about it over email, thereby providing a written track of their wrongdoings, they have lost the grip on reality and started thinking of themselves as untouchable.
This sort of behavior will eventually bring about their demise. If it continues, the fall will be both sooner and harder than I thought.

#103138

Posted by unregistered user at 2/29/08 8:47 a.m.

As mentioned, by having more (older) machines seen as Vista Capable it helps Microsoft (short term) by selling more upgrade copies of Vista. But it shows they were more concerned about sales than customer satisfaction since it was quite clear these addditional users would have a lousy experience.

Steve Jobs has his flaws, but how often does he ship lousy products?

#103155

Posted by unregistered user at 2/29/08 9:41 a.m.

Isn't this Vista Capable marketing campaign Microsoft's doing in the first place? My laptop came with a sticker like that (which I peeled off) and installed Ubuntu Linux on. I've been using it since (nearly 2 years on this machine), and the compiz-fusion effects (search youtube) are great on the intel 945gm integrated video (915 chipset...)

Even if some people at Microsoft had doubts, they still went through with it. If it can only run the bare bones version, it is bait and switch. They deceived customers and retailers. If they appeased intel by selling more computers this way, each machine came with a Windows license, and a user that (if they bought the machine for Vista compatibility) would spend money on that. And maybe that user would pick up a copy of Office too, since Vista's WordPad can no longer open .doc files... Ultimately this benefits Microsoft in the long run, if anything this probably hurt people's perception of Intel's graphics hardware.

What can I say, I'm glad not to be stuck using Microsoft's OS. Those holding on to XP, it will go into extended support soon, which means pay for updates. Feel free to search this, but Microsoft wanted to charge $40,000 dollars for the daylight savings fix for Windows 2000. They lowered it to the oh so reasonable price of $4000 dollars.
I got a free update for Ubuntu Linux for DST...

Microsoft treats customers this way because they think you can't use anything else. You need some app that is Windows only or runs Windows best. Well, take a look at the Wine project (run Windows apps without Windows at all), or virtualization. MS is promising that stuff, but Linux users have it now. If you have a recent (as in a couple of years) intel or amd chipset, you should have hardware virtualization support.

So if you are happy with Vista or whatever fine. If you aren't, do something about it.

#103427

Posted by rptizzle at 2/29/08 7:17 p.m.

Thanks for all the comments. I haven't installed Ubuntu on my Dell laptop because I've been afraid of not having all the functionality I currently have (lack of drivers). However, I think I'll give it a try. Open-source is the way to go. Freedom to the people!

#104313

Posted by unregistered user at 3/3/08 5:17 p.m.

"Windows 2000. They lowered it to the oh so reasonable price of $4000 dollars."
We've got hit by the DST fix on our Exchange2000. It solves the problem on the calendar/appointment issues. My question is why there is no minimum installation CD version for all uSoft OS'es. Like an XP lite or Vista Lite versions. Why we are force to pay for those extra programs that we don't need. They can put those extra programs on their web and just ask the user "pay per download" Why???

#106345

Posted by unregistered user at 3/8/08 9:22 p.m.

Anyone got an actual picture of John Kalkman? Can't find on Google image.

"We don't know who John Kalkman is," said Intel spokesman Chuck Mulloy this afternooon. "We do know he's not qualified to know anything about internal Intel financials or forecasts related to chipsets, motherboards or any other products."

Microsoft General Manager of OEM & Embedded Worldwide Engineering John Kalkman

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