Microsoft Watch - Corporate - Intel-Microsoft Vistagate, Part 3: News Analysis. Did Intel and Microsoft executives collude to reduce the "state of art" for Windows Vista graphics chip sets? I said "Most likely" in February blog posts, after 158 pages of court documents were released as part of the Windows Vista Capable lawsuit. More sealed documents were released Nov. 14, and they further suggest that monopolies Intel and Microsoft colluded to reduce the graphics standard to accommodate Intel's 915 chip set....
Court documents show that... Microsoft removed the WDDM requirement and [so]... assured that systems running non-WDDM chip sets (the majority being Intel's 915 at the time) could run Vista Home edition.... Why then should Microsoft lower the standard, creating hardship for its customers and OEM partners?... Microsoft employee John Kalkman wrote about the 915 chip set: "We lowered the requirement to help Intel make their quarterly earnings so they could continue to sell motherboards with the 915 graphics embedded." Later, after explaining some of the negative market results, he admitted: "It was a mistake on our part to change the original graphics requirements."...
Public acknowledgment that Intel's main graphics chip set wouldn't support Vista posed potential risks for the company on Wall Street. At the time, everyone expected Vista would be ready for holiday PC sales. So, it would be crucial for OEMs to ship Vista-ready PCs throughout as much of 2006 as possible. If 915 wasn't ready, OEMs would have to use different graphics chip sets. In that context, statements about "losing volume every hour" and helping Intel "make their quarterly earnings" make sense of what happened.... Nick Davidson's "losing volume every hour" e-mail was in response to another sent by Renee James the previous day. Renee wrote:
Tonight [Microsoft] called with unbelievable news. They are going to change the Vista Capable (this is the real name of the program) to include 915/Alviso chipsets. This is a major turn of events. The net result is that all Intel integrated chipsets will be supported in the program. All 915 and 945 parts will be considered Vista Capable...MS will no longer require LDDM (WDDM) driver in the requirements...Starting at RTM (Aug. 31), 915 will be disallowed because it doesn't have LDDM...There will be an online test tool to run on your PC to see if it can run Aero Glass—and our 915 systems will fail.
Based on the available information, I come to an easy conclusion: One monopoly colluded with another for economic gain—and in this instance causing harm to Microsoft, its partners and customers. Matters were even worse than intended, because Microsoft delayed Vista:
- Vista-inferior chip sets stayed in market longer than they otherwise should have.
- More consumers bought PCs incapable of fully running Aero Glass.
- Notebooks were disproportionately affected, because the state of the art was even lower than for desktops.
According to a Feb. 27, 2007, Microsoft e-mail: Only 60 percent of graphics accelerators shipping on desktops or notebooks supported WDDM during fourth-quarter 2006; 30 percent were Intel 915 chip sets.... Intel's chip set development was out of sync with Windows Vista. The problem was bigger than existing inventory; Intel didn't have a compliant chip set ready for market....
Intel and Microsoft are frenemies; they're rivals and partners—and both are monopolies. In antitrust law, collusion usually applies to price fixing. But other legal definitions include fraud. Did Intel and Microsoft defraud consumers by way of Windows Vista Capable stickers on PCs that weren't fully capable of running the operating system? The Windows Vista Capable lawsuit may or may not find civil liability around fraud and deception....
The answer to the question of intention is still uncertain. It's hard for me to accept that Microsoft executives would knowingly, aggressively and foolishly deceive customers to their harm and to that of the company and its partners. Collusion to lower the standard of art benefited Intel much more than Microsoft. What's needed is something akin to the flashbacks used in the TV show "Lost" to fill in what's missing and uncover motivations that determine whether or not executives colluded to deceive or to befriend. Stupidity isn't a crime.
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