Wal-Mart: Microsoft should kill Vista Home Basic

You may think of Wal-Mart as a down-market PC seller, but as emails in the Vista "junk PC" case show, Wal-Mart was furious at Microsoft's Vista Capable scheme, and thought that Vista Home Basic never should have been developed, much less released. They're not alone. Other retailers, notably Office Depot, thought Vista Home Basic should have been killed. Here's all the dirt, including emails.

The recently unsealed Microsoft emails are part of the lawsuit against Microsoft for a marketing scheme in which people claim that Microsoft misled consumers into buying the Windows Vista Capable PCs, even though the PCs couldn't run the most important features of Vista.

Microsoft execs had a series of meetings with retailers to explain the ill-fated Vista Capable scheme, and the retailers were not amused. They felt that the scheme would confuse consumers, and leave consumers dissatisfied with their purchases. Retailers had previously been burned because Windows XP had two flavors (Home and Pro), and consumers had been confused.

Wal-Mart was particularly unhappy, both with the Vista Capable scheme, and more than that, with the fact that Microsoft was releasing Vista Home Basic, which is such a stripped-down version of the operating system that even some Microsoft officials don't consider it Vista.

On February, 2006, Microsoft exec Robin Leonard wrote this to other Microsoft officials about what Wal-Mart had to say:

Wal-Mart was very vocal regarding the Windows Vista Capable messaging. They are extremely disappointed in the fact that standards were lowered and feel like customer confusion will ensure...They also went so far as to say that they wished Windows Vista Home Basic was not even in the sku line up. The would totally support the higher ASP, but feel that competitors will be offering Windows Vista Home Basic machines and as such they need to support that for their opening price point.

Doug Degn (EVP-Electronics) spoke about how we could be creating the biggest nightmare by giving editors the opportunity to simply say don't buy a Windows Vista Capable machine because you can't trust the logo.

Wal-Mart wasn't alone in its disdain for Vista Home Basic --- the emails show that Microsoft execs and Office Depot weren't particularly happy with it, either. As I point out in another blog, in an August 10, 2005 email Microsoft Director Rajesh Srinivasan refers to Vista Home Basic as "Windows 2006," so Microsoft execs knew it wasn't really Vista.

Office Depot was also unhappy about the Vista Capable plan, and wished that Microsoft had never created Vista Home Basic. Here are excerpts from a February 1, 2006 email from Microsoft exec Troy Nelson about a meeting he had with Office Depot:

  • Home Basic -- very strong concerns over this
  • We created confusion with the Home vs Pro with XP launch. Channel was looking forward to the next major OS release to make it better. Concerned that we made it more confusing not less. They pointed out that Apple has 1 OS, not multiple.
  • Home Basic will not possess the major feature sets that MS is focusing on, such as Aero & Flip. Concerned that we advertise "Vista" with these features, but there will be cust dissatisfation & returns when they buy Home Basic & don't get those features.
  • They would have preferred that MS not have a Home Basic. They see this Vista variant as selling down. But since we are releasing it & they know their competitors will carry it, they will be forced to assort to maintain competitive offering.
As for the Vista Capable scheme, Microsoft faced a groundswell of opposition from retailers. Here's what Microsoft exec Steve Schiro had to say about it in a February 27, 2006 email about Wal-Mart's opposition to it:
This feedback has been consistent from retailers around the world. We should not let consumers or retailers have to decipher what windows Vista capable means.
There are a lot of questions still unanswered about all this, but here's betting that you won't see a Windows 7 Home Basic, not if Wal-Mart and Office Depot have anything to say about it.

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