Microsoft caught pants down in Intel love affair

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Microsoft caught pants down in Intel love affair

Redmond (WA) – Leaked internal Microsoft emails reveal just how much Microsoft depended on Intel when launching Windows Vista. The emails not only showcase Microsoft love-hate relationship with the processor company, but also that it had all signs that pointed to a potential disaster of the Vista Capable/Ready campaign.

Is your PC Vista Capable or Vista Ready? Don’t tell us you have no idea what the difference between “capable” and “ready” is. Isn’t it obvious?

At least Microsoft’s marketing staff thought so, as a huge PDF document containing 158 pages of internal Microsoft emails (courtesy of the Seattle Post Intelligencer) reveals. “Capable” simply was meant to describe PCs that could run Vista in basic mode, but not the fancy AeroGlass GUI. “Ready” (later changed to “Premium Ready”) was the description for PCs that could run all of the operating system’s eye candy.

The document was released as part of a court’s decision in a class action suit, which attacks Microsoft’s “Designed for Windows XP”/”Vista Capable”/”Vista Ready” marketing campaign. Filed in April of 2007, the suit surfaced briefly after consumers found that some of Dell’s Vista “Ready” PCs were actually just “Capable”. It is everything but good news for Microsoft’s legal team, because it turns out that the company ended up protecting the interests of Intel and Dell, and went against the will of other OEMs and channel partners – and accepted the risk of confusing consumers.

The email list covers a timeline from mid-2005 to the beginning of 2007 and highlight Microsoft’s struggles to convince OEM’s, retailers, manufacturers and even its own executives of the Capable/Ready marketing program. Not knowing what other communication happened, those emails initially blame Intel for the necessity of this confusing program, at least partially.

In January of 2006, most PCs in the market were simply Vista Capable, carrying chipsets such as Intel’s 865 and 915. Microsoft estimated at the time that only 30% of the PCs (those with discrete graphics cards) would be able to run AeroGlass at the time. And apparently, Intel wasn’t much help improving this environment for Microsoft: In August 2006, five months before the launch of Vista (and two months after the launch of the Vista Ready marketing campaign), Microsoft noted that Intel in fact had been late with its Vista Ready chipsets (945, 965), which caused the majority of the products in the market to carry 915 chipset-based motherboards, which were just “Vista Capable” or “Designed for Windows XP”.

Unfortunately, there is no evidence of any communication with Intel in the document, but some Microsoft employees were concerned about the 915 and looked for ways to replace it with the 945 as soon as possible, which did not happen soon enough. “We are allowing Intel to milk 915 with Vista while allowing and paying for OEMs to deliver a poor Windows Vista experience,” one email read. A stated goal was to force Intel to drop the 915 by October 2006, which did not happen, mainly because the 915 and 925X had trouble receiving PCIe certification, which delayed the 945. So Microsoft apparently turned to OEMs and used a different angle: An email suggested telling OEMs “to take a hard look at their roadmaps” and letting them know that the 915 would not qualify for the “Ready” logo and certain incentives would not be available to them.   

In the end, the late 2005/early 2006 discussion came too late, as the PC product cycle for H1 2006 was finalized and in the market; there was little change possible for the (pre-delay) June 1 marketing launch date of the Vista “Ready” logos for PCs. In the end, you may conclude that it was Intel’s market dominance and policies that forced Microsoft to lower the Vista requirements to be able to stick the Vista label on all PCs. You may ask what role AMD played: There are just a handful of emails that highlight their status within Microsoft: AMD wanted to delay the June 1 program launch date, because the company feared Dell would have a launch advantage by having certain Intel “Ready” chipsets at that date. Microsoft denied this request and noted that AMD was not aware that Dell would only have 915 chipset machines available by June 1, 2006.

Read on the next page: “We really botched this.”


“We really botched this” 

You see where this story is going: The two-tiered Capable/Ready program took shape and was put in place – against the advice from Dell, retailers such as Best Buy and Wal-Mart and even commitments made to Hewlett-Packard. HP apparently invested “heavily” into preparing PCs with more graphics capabilities for the “promised that Microsoft would not give in to Intel” and leave the 915 behind.  Addressing this issue, one email reads:

“We are caving to Intel. We worked hard the last 18 months to drive the UI experience and we are giving this up. The OEMs are behind us here, we have the support we need to drive this experience on today’s hardware. We are really burning HP – who committed to work with us to drive the UI experience across platforms and have already made significant investments. These three things just don’t add up to me. We are allowing Intel to drive our consumer experience. I don’t understand why we would cave on this when the potential to drive the full UI experience is right in front of us.”

Most PC manufacturers were concerned that a two-tiered logo program or substituting Vista Capable for “Designed for Windows XP” would stall PC sales, if introduced too early. Dell requested that such a program should not be made public earlier than 90 days prior to launch of the product to allow the company to flush out its inventory of old PCs. The company also felt that two logos would add “another level of complexity to an already complex product”. Wal-Mart told Microsoft that customers are likely to be confused by such a program and therefore was in favor of ditching the entry-level version Windows Vista Basic completely.

However, the primary goal of the two-tiered program was to keep PC sales numbers by suggesting that all those PCs can run Vista, in one way or the other. You may not have been the only one who was confused by Microsoft’s message. Steven Sinofsky (senior vice president, Windows and Windows Live Engineering Group) wrote in an email: “I was in bestbuy listening to people and can tell you this one did not come clear to customers. We set ourselves up. Also, I searched and wasn’t able to find a ‘premium ready’ machine.”

The sole goal to avoid stalling PC sales is seen throughout all emails, with many employees actually trying to clear up the message. It wasn’t meant to be, as Vista Ready was already tied in with Dell and Intel when the discussion began. For some reason, the consumer isn’t mentioned in more than a couple cases and even if we have listened and tried to understand well-oiled marketing machines, it is surprising to see how little the PC buyer was considered in this (published) communication.   

Jim Allchin, who wanted Vista to become his masterpiece at Microsoft, was part of the communication, but apparently much too late. “We really botched this. I was not involved in this decision process and I will support it because I trust you thinking through the logic. But, you guys have to do a better job with our customers that what was shown here. This was especially true because you put me out on a limb making a commitment. This is not ok.”

So, if you were confused by Microsoft’s Ready campaign, don’t worry. Microsoft was every bit as confused itself.