Emails Reveal How Vista Decisions Infuriated HP

From PC Mag:

http://www.pcmag.com/article2/0,2817,2335152,00.asp

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Emails Reveal How Vista Decisions Infuriated HP
11.21.08

By Mark Hachman
Issues with Intel's integrated graphics touched off a cascade of
complications affecting Microsoft's Vista rollout, prompting the
creation of the "Vista Capable" designation that eventually angered
Microsoft customers Hewlett-Packard and Sony.

Emails unsealed last week by a district court judge reveal the at-times
heated back-and-forth discussions between Microsoft and its partners.
The case, filed by two consumers, was brought against Microsoft in a
Washington state court earlier this year, and later given class-action
status.

A new batch of emails, released Thursday, point to a even more problems
between HP and Microsoft, as HP chief executive Mark Hurd complained to
Ballmer that the company was "being overrun" with support calls.

Covering a period from roughly April 2005 through Feb. 2007, the emails
show that Intel was initially unable to supply an integrated graphics
chipset that would meet the needs of the "Aero Glass" interface that
Microsoft had so highly touted in Vista. However, the company had a
stockpile of older, less capable chips.

At Intel's request, Microsoft created a "good/better/best" product
rollout strategy, ranging from "Windows Capable" to the Basic and
Premium Vista logo programs, allowing PC makers to manufacture low-end
PCs using the Intel 945 "Calistoga" chipset and thus participate in the
Vista launch. Those chipsets lacked a Windows Display Driver Model
(WDDM) (also referred to as the Longhorn Display Driver Model) driver,
one of the keys to the Aero Glass interface.

Hewlett-Packard, meanwhile, had invested heavily in leading edge Intel
chipsets, even designing two motherboards around them. The inclusion of
the "Vista Capable" designation angered HP, worried Sony, and even
frustrated some of Microsoft's marketing and technical executives.
While the emails further detail the level of frustration felt by
Microsoft's partners, the initial motivation for the Vista Capable logo
was explained in February, when another passel of email was released
describing more of the relationship between Microsoft and Intel, and the
integrated chipsets. The smoking gun there was the astounding lack of
driver support that accompanied Vista's launch, a consequence of
Microsoft's apparent lack of credibility with independent hardware
vendors. In those emails, both Microsoft senior executives as well as
board member and former Microsoft president Jon Shirley complained about
the lack of drivers and the overall poor user experience on Vista
machines. The reason? Microsoft's partners didn't trust the company to
ship Vista on time.

Sony weakens "Vista Ready" requirements

In late 2005, Microsoft was worrying about how its PC OEM partners would
prepare for the launch. Vista optimized PCs would go out on launch day,
but there was a concern about whether or not existing PCs could run
Vista. A "Vista Ready" list of requirements had been passed along to
OEMs for about a year, and Microsoft executives were reluctant to change
them, which they eventually did.

The problem Microsoft faced was how to prepare the market for Vista
without cannibalizing Windows XP sales. Windows manager Rajesh
Srinivasan sent an email to several managers on Oct. 11, 2005, noting
that it was "impractical" for OEMs to design systems without something
to test against. "The primary goal of Ready PC program is to limit stall
of XP sales as we continue to build Vista buzz," he wrote.

"You cannot go out and 'reset' Ready PC requirements with OEMs," wrote
Mark Croft, a Microsoft marketing director, on Nov. 1, 2005. "This is a
very highly charged topic with OEMs." But Srinivasan also worried about
"customer dissatisfaction" with PCs that were marketed as Vista Ready,
but would not be able to run the premium Aero Glass graphics interface.
After a conversation with Sony executives and its own graphics team,
however, Microsoft punched several holes in its logo programs where
ultramobile (UMPCs) and ultraportable (UPPCs) were concerned. On Dec.15,
2005, Windows manager Rajesh Srinivasan sent former corporate vice
president for Windows Product Marketing Mike Sievert a lengthy email,
waiving the premium graphics requirements for ultraportable PCs (UPPCs),
and the Vista logo requirements for ultramobile PCs (UMPCs). The
rationale Srinivasan gave was to "close the issue and protect
[Sievert's] credibility with Sony."

"This gives Sony the ability to market UPPCs and UMPCs as Premium,
despite not meeting the graphics logo criteria," Srinivasan wrote.

Next: Intel Issues Arise

"Mike promised that 'Sony UPPCs will qualify for the Vista logo,'"
Srinivasan added. "What Mike meant was that Sony UPPCs can get the Vista
premium logo without meeting all the criteria for Aero Glass, as long as
they meet their criteria for premium logo. We are waiving Aero (DWM)
requirement for UPPC to support Mike's commitment to Sony."

In part, Microsoft made its choice because Sony was transitioning its
UPPCs to the Intel 945GM chipset, specifically designed for the
category. Fujitsu also made a request to have two of its UPPCs that
would use the 945GMS (identified in the emails as the 915GMS) exempted
from the WDDM requirement, but Microsoft refused.

Intel issues arise

In order to successfully launch Vista, coordination between both halves
of "Wintel" was necessary to bring the proper message to the two
companies' partners, Microsoft believed. Between the two companies, the
tone was cordial.

Privately, however, Microsoft's evaluation was much harsher. One of the
earliest emails made public by the court was in July of 2005, where
Chris Jones, then the corporate vice president of Windows Client Core
Development, complained about the quality of the Intel 945 "Calistoga"
chipset.

"When we set out to do LDDM we knew that we needed a high performance
graphics part," Jones wrote. "We told Intel that their part would need
work and would be a constant risk. I am amazed we are even getting it
close to working on Calistoga. I know this causes friction with Intel
but you can't just do the stuff we want to do on their part, it is
crappy for graphics."

But on July 6, Windows Client chief Will Poole responded to Jones,
noting prophetically that "LDDM does not make much difference in the
marketplace if we don't get across the line with the chipsets that
do/will account for 80 percent of the market."

Intel apparently understood this, too. In August, Intel began messaging
OEMs that the Intel 915 chipset would provide "an optimal Windows Vista
experience," according to the unsealed emails. Srinivasan expressed
concern, noting that "OEMs are locking in their spring refresh with
Intel 915, and Intel/OEMs do not want us to message to customers in the
unmanaged space till June 06 that these systems would not provide the
full Windows Vista experience."

This worried Microsoft. That same month, however, Microsoft posted an
article on its TechNet developer Web site, authored by a third party
employee. In it, the author recommended to Microsoft developers and OEMs
that they buy a PC with a graphics connector, and not rely solely on
integrated graphics. The upshot? Intel's integrated graphics chipsets
couldn't cut it. The article was quickly pulled, but not before Russian
Web site Xbit Labs posted a summary.

On Jan. 25, 2006, Poole emailed Renee James, a senior vice president at
Intel. Poole said he saw "two issues converging": the timing of when
Vista Capable machines could be stocked and marketed, and how the
marketing program would affect the demand for the PCs. Poole also
highlighted an issue with Intel's newest 945 "Lakeport" chipset, which
hid a bug involved in playback of ATSC encoded HD data in Windows Video.
Poole wrote that there was "no way" either company could permit Intel
945 systems not to carry a Vista logo. But the key issue was one of
supply, and here Poole said Microsoft's path was clear. "The decision is
obvious for us," Poole wrote. "We've got to start the marketing plan in
June which means we are going to allow OEMs to start stocking and
shipping in to channel Vista Capable logo's PCs in April."

But that was a problem. On Jan. 27, James emailed Poole, asking Poole
for a meeting with Otellini, and complaining that the April 1 marketing
date felt arbitrary. "Our parts are not tested, not validated," James
wrote.

"[Otellini] thinks you really don't understand that almost all of our
mobile SKUs for the next 5months [sic] are with Centrino with Alviso and
therefore NEVER Vista ready, and Mobile is a huge part of retail and
growing," James added.

On January 30, Microsoft capitulated. Poole sent an email to Ballmer
advising him that Microsoft had revised its branding program, making
Intel's 915 chipset fall under the "Vista Capable" branding in April
2006. "This change completely resolves their problem," Poole wrote.
"Renee [James] is very pleased and will report as much to Paul
[Otellini].

But even Ballmer wasn't convinced. "I thought they had other issues
certainly paul described other (non graphics issues) is this really
resolved check with her thanks," he wrote.

Microsoft manager Mike Ybarra also spoke up. "This kind of *** drives
me crazy, Chris," Ybarra wrote. "We have pushed the UI so hard the last
18 months and we get our OEMs to go with higher-end chipsets and
graphics parts on existing PCs to really drive the experience for
consumers and at the last minute we cave and give 915 and other chipsets
a backdoor into the programs.

"I hate the idea of a consumer upgrading a PC that we have marked as
"Vista Capable" and not getting the great UI experience. I know this is
a marketing call here but at some point we have to stick to our guns ­
we had the partner momentum to be successful here.

Serious plans were put in pace by OEMs, which were "wasted," Ybarra
wrote.

On the same day, Ybarra notified Will Poole, who said that he was
"worried" about the machine requirements, and said that he had "no idea
what a 'modern CPU means". "I am worried about the memory number below,"
Poole wrote. "We should be encouraging more memory. Min [Minimum] 512K
is still ok, but it is min."

Poole also noted that the Intel 945 chipset, with a dual-channel memory
controller, would run the Aero Glass interface well, but there was only
a limited supply.

And then all hell broke loose with one of Microsoft's biggest hardware
partners, HP.

The HP debacle

Rajesh Srinivasan reported on Jan. 31 that Greg Taylor, an HP systems
engineer, knew that Microsoft is changing the requirements for Vista
Capable. "HP is not going to be happy with this change," Srinivasan
writes. He was right; the strategy shift made its way quickly up the HP
corporate ladder.

On Feb. 1, Poole reported that someone had leaked Microsoft's change to
HP. Ballmer replied: "Great by me but Jim [Allchin, co-president of
Microsoft's Platforms & Services Division] is apoplectic I know nothing
of the details please advise."

Allchin wasn't the only one who was upset.

Richard Walker, who had been appointed to run the PC business at
Hewlett-Packard, wrote Kevin Johnson and Allchin just before 9 AM,
referencing a "rumor" that Microsoft had reneged on an Aug. 2005
agreement to require a WDDM driver, which the Intel 910 and 915
platforms did not have. The rumor was indeed true, as Walker said he had
discovered.

"I can't be more clear than to say you not only let us down by reneging
on your commitment to stand behind the WDDM requirement, you have
demonstrated a complete lack of commitment to HP as a strategic partner
and cost us a lot of money in the process," Walker wrote. "Your
credibility is severely damaged in my organization, I have engineers who
have worked their tails off to qualify new platforms to support WDDM who
are wondering why they put so much effort in when Microsoft changed the
rules at the last minute and didn't even consult us before the
announcement."

"If I were to be completely cynical about the course of events leading
up to this, I'd suggest that my friends in Santa Clara slept well last
night knowing that they didn't have to worry that part of their line up,
non compliant as it would have been on WDDM requirement for 1/4, will be
exposed to public scrutiny," Walker added. "I'm three months into this
new role and I hope this incident is not a foretaste of the relationship
I will have with Microsoft going forward, but I can tell you it's left a
very bad taste with me and my team."

At 9:01AM, Allchin emailed Ballmer and Kevin Johnson. "I am beyond being
upset here," Allchin wrote. "This was totally mismanaged by Intel and
Microsoft. What a mess.

"Now we have an upset partner, Microsoft destroyed credibility, my
credibility shot," Allchin continued. "I was away and I get back to see
this mess. I was told this all started with a call between you and Paul
[presumably Otellini, the chief executive of Intel]. I will have to get
to the bottom of this and understand how we could be so insensitive in
handling the situation."

Allchin left Microsoft the day of Vista's launch.

Later that day, Ballmer replied: "I had nothing to do with this. Will
handled everything."

Ballmer said in his message "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 detail of those issues.


"You better get Will under control thanks," Ballmer concluded.
On Feb. 13, Ken Goetsch emailed Will Poole and Kevin Eagan to propose a
$7 million "marketing fund," basically payback for the $6.8 million HP
internally estimated that they had spent on "parts," or the motherboard
development.

HP's problems continued, although they weren't specifically tied to
Microsoft. In a new packet of emails reported by TechFlash on Thursday,
HP experienced a higher than expected number of support calls in
conjunction with a fulfillment partner, ModusLink, and a "Express
Upgrade to Windows Vista" program that was offered to OEMs and managed
by Microsoft. The project suffered from poor Web design which drove
customers to phone support lines.

HP complained, and escalated the problem up to chief executive Mark
Hurd, who sent a note to Ballmer: "Steve, I'm sure you're aware of this.
Our call lines are being overrun."

"I am going to continue to elevate these issues, our customers and HP's
reputation is getting hurt by poor execution and we need more aggressive
action on your part," Todd Bradley, then executive vice president of
HP's Personal System Group, wrote on Feb. 5, 2007.

The latest emails also provide Ballmer with briefing background details
on several reporters, as well as a long back-and-forth with analyst and
columnist Rob Enderle, who offered Microsoft executives advice on how to
message Vista and its graphics capabilities.
.

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