Microsoft group suggested dropping 'Vista' from Home Basic, docs show

Internal discussion over name showed concern over 'user expectations' in '05

A group within Microsoft Corp. recommended in 2005 that the lowest-priced version of Windows Vista be released without the Vista name because of concerns over "user product expectations," according to documents unsealed by a federal court today.

The disclosure was made in a filing by the plaintiffs in a class-action lawsuit that claims Microsoft misled consumers with its "Vista Capable" marketing program in the months leading up to the January 2007 release of the operating system.

"Microsoft studied the precise question of whether Home Basic should be called 'Vista,'" said the plaintiffs in papers that were filed Dec. 8, 2008, but released to the public only today by U.S. District Court Judge Marsha Pechman. "The recommendation of the Windows Product Management Group was that Home Basic should 'carry the Windows brand alone without the Vista generation name,'" the plaintiffs said, citing an August 2005 internal Microsoft e-mail it obtained as part of the legal discovery process.

The group, which presented its recommendation in what the plaintiffs' lawyers have dubbed the "White Paper," said ditching "Vista" from the Home Basic edition would "better align user product expectations to the high visibility innovations uniquely present in the Windows Vista premium versions."

The plaintiffs also said the decision to drop Vista from the Home Basic nameplate was "affirmed by a strong endorsement from top OEM partners," and specifically mentioned that Dell Inc., the world's No. 2 seller of PCs, agreed with the idea.

Vista Home Basic is a key to the lawsuit, which alleges that Microsoft's Vista Capable program inflated the prices of PCs that could run only the lowest-end edition. Home Basic, the plaintiffs have contended, is not the "real" Vista, in large part because it lacks the Aero user interface.

In fact, Microsoft relaxed the hardware rules for Vista Capable in early 2006 so that PCs using older graphics chip sets made by Intel Corp. would qualify for the program. Those chip sets were not able to run the Aero interface.

Microsoft has denied that it duped consumers and has countered that Home Basic is a legitimate version of Vista. In a reply filed today, Microsoft reiterated those claims. "From the perspective of computer code and development, a jury could only conclude that Windows Vista Home Basic fairly belongs within the Windows Vista family," Microsoft said in the reply.

The company charged that the plaintiffs misrepresented the White Paper. "Plaintiffs make much of a 'White Paper' from August 2005 in which some Microsoft employees proposed that Microsoft not call Windows Vista Home Basic 'Windows Vista,'" Microsoft said in the filing. "But the White Paper gives a more balanced assessment than Plaintiffs portray. It expressed concern that removing the Windows Vista name from Windows Vista Home Basic could create 'customer confusion' because customers might think 'a new PC with Home Basic did not come with the latest [operating system]' when in fact it did."

In any case, Microsoft said it's allowed to decide what it calls its products, whether and how it creates separate editions of a piece of software, and what price to charge. "The law gives Microsoft the right to define its software products, to license its software in different editions, to determine what features each edition will include, and to charge more for premium features," the company said.

That's the same right car companies have when they roll out multiple models in a line and charge different prices for different feature sets. "Nor does any principle suggest that Toyota may not 'fairly' call its entry-level Camry a 'Camry' -- even if the ads show the luxury edition," Microsoft argued.

Tomorrow, Pechman will hear oral arguments from both sides in the case before deciding whether to grant a pair of motions that Microsoft made in November when it asked her to end the class-action lawsuit.

The case has been notable for the embarrassing insider e-mails that have showed how the company bent to pressure from Intel over the program's hardware requirements, and infuriated longtime partner Hewlett-Packard Co. at the same time. Almost a year ago, other internal e-mails showed that even top-level executives were confused and frustrated by Vista soon after its 2007 release.

The lawsuit was originally filed in April 2007, and was granted class-action status in February 2008. It is currently set for an April trial.

Copyright © 2009 IDG Communications, Inc.

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