Microsoft's 'Vista Capable' changes outraged HP, insider e-mails show

By helping Intel, Microsoft 'severely damaged' its credibility with HP, exec said

A Hewlett-Packard Co. executive was furious at Microsoft Corp. over the company's decision to loosen the requirements for its "Vista Capable" marketing campaign, internal e-mails unsealed by a federal judge on Friday show.

"I hope this incident isn't a foretaste of the relationship I will have with Microsoft going forward, but I can tell you that it's left a very bad taste with me and my team," Richard Walker, senior vice president at HP's consumer PC unit, said in a Feb. 1, 2006, message to senior Microsoft executives.

One of those executives, Jim Allchin, who was in overall charge of Vista's development and delivery, was almost as outraged. Allchin told his boss, CEO Steve Ballmer, that he was "beyond being upset" by the move. Ballmer denied being party to the decision.

The e-mails were unsealed by U.S. District Court Judge Marsha Pechman in the class-action lawsuit that accuses Microsoft of deceiving customers in 2006 by certifying PCs as able to run Vista when it allegedly knew the machines were able only to handle the stripped-down Vista Basic, a version that lacked the new, heavily-promoted Aero interface, and other touted features. Vista was released early in 2007.

In early 2006, Microsoft relaxed the Vista Capable rules by allowing computers equipped with Intel's older 915 graphics chip set to qualify for the program. Will Poole, then responsible for the client version of Windows, tossed out the requirement that a PC's graphics use the Windows Device Driver Model (WDDM), Vista's revamped driver architecture that debuted in Vista.

The decision pleased Intel Corp., which had complained that it didn't have a sufficient supply of the more advanced graphics chip sets that would have met the original requirements. In fact, Intel CEO Paul Otellini sent a note to Microsoft's Ballmer thanking him for the change.

HP, however, was anything but happy.

"The decision you have made 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," said Walker in the Feb. 1, 2006 e-mail, which he sent to Kevin Johnson, Microsoft's chief operating officer, and Allchin.

HP, unlike other computer makers preparing for Vista, had decided to ditch the low-end Intel 915 and 910 graphics chip sets to make sure that its low-priced PCs would be able to run Vista. In another e-mail cited in the same group of messages unsealed Friday, Walked said HP had designed and built two new motherboards for its upcoming Vista Capable lines.

According to the separate plaintiffs' motion filed last Thursday -- which included numerous citations of internal e-mails but did not always quote them in their entirety or attribute them to an individual -- HP spent nearly $7 million on the technology to make its machines meet the original Vista Capable requirements.

"Now we have a situation where PC manufacturers (and processor/chip set suppliers) can claim Vista Capable in a 'good' mode just because it will run," Walker continued. "What kind of consumer assurance is that? Hardly one that puts any credence behind your desire to create the 'best possible customer experience for the Windows Vista Upgrade.'"

Walker went on to tell Johnson and Allchin that Microsoft's credibility at his HP group had been "severely damaged" because Microsoft had "change[d] the rules at the last minute" without notifying HP.

Allchin fired off a blistering e-mail to his boss, Steve Ballmer, within 10 minutes of Walker sending his message. "I am beyond being upset here. This was totally mismanaged by Intel and Microsoft. What a mess. Now we have an upset partner, Microsoft destroyed credibility, as well as my own credibility shot," he wrote to Ballmer.

"I was told this all started with a call between you and Paul [Otellini, Intel CEO]. I will have to get to the bottom of this and understand how we could be so insensitive to handling the situation."

In other messages, Allchin had called the decision to allow computers powered by Intel's 915 chip set to qualify for the Vista Capable program as "misleading customers." Allchin, who worked 17 years for Microsoft, retired the day Vista was released in late January 2007.

Ballmer denied having any part in the decision to loosen the rules for Vista Capable by ditching the WDDM requirement and instead put the responsibility on Poole's shoulders. "I had nothing to do with this," Ballmer said in a reply to Allchin later in the day on Feb. 1, 2006. "Will [Poole] handled everything. I received a message that Paul was goignt o [sic] call. Will said he would handle it. Paul called. I had not even had a chance to report his issues when Will told me he had solved them. (It did not sound like he had.) I am not even in the details of the issues," Ballmer said.

"You better get Will under control," Ballmer concluded.

Although the plaintiffs have asked to depose Ballmer, Microsoft has tried to block the demand. In a filing last month, Ballmer said he had no "unique knowledge of, nor did I have any unique involvement in any decisions regarding the Windows Vista Capable program."

Poole, a 12-year veteran of Microsoft, was assigned in mid-2007 to head a group devoted to emerging markets, but left the company this past September. He is now the co-chairman of NComputing Inc., a Redwood City, Calif.-based company that makes hardware and software that lets multiple users share a single PC.

According to analysts, the departure of several Microsoft executives responsible for Vista after its lackluster start came as no surprise.

HP was not finished telling off Microsoft, however. In another message -- also included in the Thursday motion -- an unidentified HP executive blasted Microsoft some more.

"It's not very often you get pulled out a meeting by a group of engineers who feel that they have had the rug pulled out from underneath them so that any competitive advantage we may have had in the marketplace is taken away, enabling any Tom, Dick or Harry with a PC containing a noncompliant processor/chip set to play at the same table," the e-mail read. "It begs the question when is a PC really Vista-capable."

It is possible that the author of the e-mail included in the Thursday motion was also written by Walker, since it references a previous message to Johnson and Allchin. "As I said in my note to Jim [Allchin] and Kevin [Johnson], it appears you have bowed to pressure from a partner who would have been embarrassed in the April time frame because their lineup was not completely compliant," the message said. Microsoft and its reseller partners launched the Vista Capable program in April 2006.

Last week was the second time that a number of insider e-mails have been made public during the case. Last February, Pechman unsealed several hundred messages that, among other things, described the problems that some top Microsoft officials had with Vista shortly after it was released and, as in the newest disclosures, revealed serious disagreements by some over the program.

The lawsuit, which began nearly a year and a half ago, was granted class-action status last February. It is currently set to go to trial in April.

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