Intel refuses to upgrade to Vista; Microsoft feels cheated

Detractors have often derided Microsoft Vista as an expensive piece of error-strewn software that requires expensive hardware to function decently. Now, the largest manufacturer of computer chips seems to concur with such pessimism.

In a landmark decision that can potentially affect Vista's acceptability in the PC world, Intel has decided not to upgrade its corporate computers from Windows XP to its much-publicisd successor. However, Microsoft is feeling stabbed in the back considering it claims to have earlier launched its much-criticised, legally-challenged ''Vista Capable PC'' to bail out the chipmaker.

First, the landmark Intel decision. Intel, after a lengthy analysis by its internal technology staff of the costs and potential benefits of moving to Windows Vista, has decided that it won't upgrade the PCs of its 80,000 computers to the new operating system from the existing Windows XP.

An Intel insider said there was ''no compelling case'' to make the switch. This must be especially galling to Microsoft considering that it once said businesses would embrace it twice as quickly as they did XP.

In September 2006, Brad Goldberg, general manager for Windows product management, had said, "Vista is built for businesses. We're giving businesses the tools they need to get out of the gate faster with Vista. Our goal is to have twice as fast deployment of Vista than for any other operating system.'' Now, those words seem to ring hollow.

Intel, meanwhile, claims that it is currently both testing and deploying Vista., but only in selected departments, not enterprise wide. In itself this has to come as a surprise from the company that is still known in many circles as Wintel thanks to the closeness it has shared with Microsoft in the past.

Another analyst commented that Intel's refusal to upgrade can hurt Vista more than any other denial as ''when a company as tech savvy as Intel, with full source code access and having written several large chunks of the OS, says get stuffed, you know you have a problem.''

As for the ''stabbed in the back'' feeling, Microsoft's hurt may not be entirely unwarranted. The recently unsealed official emails are part of the lawsuit against it 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.

Many of the emails show that Microsoft executives themselves were not at all happy with the marketing scheme, and it appears that they launched it to help Intel sell an aging chipset and meet quarterly earnings numbers. The chipset in question, 915, was not capable of running Windows Aero.

The problem, though, was that Intel had lots of those chips in inventory, and needed to sell them in order to hit its earnings. Microsoft's John Kalkman makes clear in an email to Scott Di Valerio, who was in charge of the company's relations with PC makers, that the Vista Capable PC scheme was being launched on behalf of Intel.

The following excerpts are especially illuminating:

''In the end, we lowered the requirement to help Intel make their quarterly earnings so they could continue to sell motherboards with the 915 graphics embedded. This in turn did two things:

1. Decreased focus of OEMs planning and shipping higher end graphics for Vista-ready programs and 
2.  Reduced the focus by IHV's to ready great WHQL [Windows Hardware Quality Labs] qualified graphics drivers. We can see this today with Intel's inability to ship a compelling full featured 945 graphics driver for Windows Vista.''

Later in the email, Kalkman admits the Vista Capable scheme was a mistake:
''...it was a mistake on our part to change the original graphics requirements. This created confusion in the industry on how important the visual aspects of visual computing would play as a feature set to new Windows Vista upgraders.''

Predictably, Intel denies that it had anything to do with pushing Microsoft to launch the Vista Capable scheme. Official spokesman Chuck Mulloy said, "We don't know who John Kalkman is. We do know he's not qualified to know anything about internal Intel financials or forecasts related to chipsets, motherboards or any other products." He added that Kalkman "would have no visibility into our financial needs in any given quarter."