...from: http://www.nytimes.com/2008/03/09/business/09digi.html?_r=1&th&emc=t...

They Criticized Vista. And They Should Know.

By RANDALL STROSS Published: March 9, 2008 ONE year after the birth of Windows Vista, why do so many Windows XP users still decline to “upgrade”?

RelatedMicrosoft's E-mail Messages (pdf)Text of Plaintiff Complaints (pdf)Text of Microsoft's Response to Plaintiffs (pdf) Microsoft says high prices have been the deterrent. Last month, the company trimmed prices on retail packages of Vista, trying to entice consumers to overcome their reluctance. In the United States, an XP user can now buy Vista Home Premium for $129.95, instead of $159.95.

An alternative theory, however, is that Vista’s reputation precedes it. XP users have heard too many chilling stories from relatives and friends about Vista upgrades that have gone badly. The graphics chip that couldn’t handle Vista’s whizzy special effects. The long delays as it loaded. The applications that ran at slower speeds. The printers, scanners and other hardware peripherals, which work dandily with XP, that lacked the necessary software, the drivers, to work well with Vista.

Can someone tell me again, why is switching XP for Vista an “upgrade”?

Here’s one story of a Vista upgrade early last year that did not go well. Jon, let’s call him, (bear with me — I’ll reveal his full identity later) upgrades two XP machines to Vista. Then he discovers that his printer, regular scanner and film scanner lack Vista drivers. He has to stick with XP on one machine just so he can continue to use the peripherals.

Did Jon simply have bad luck? Apparently not. When another person, Steven, hears about Jon’s woes, he says drivers are missing in every category — “this is the same across the whole ecosystem.”

Then there’s Mike, who buys a laptop that has a reassuring “Windows Vista Capable” logo affixed. He thinks that he will be able to run Vista in all of its glory, as well as favorite Microsoft programs like Movie Maker. His report: “I personally got burned.” His new laptop — logo or no logo — lacks the necessary graphics chip and can run neither his favorite video-editing software nor anything but a hobbled version of Vista. “I now have a $2,100 e-mail machine,” he says.

It turns out that Mike is clearly not a naïf. He’s Mike Nash, a Microsoft vice president who oversees Windows product management. And Jon, who is dismayed to learn that the drivers he needs don’t exist? That’s Jon A. Shirley, a Microsoft board member and former president and chief operating officer. And Steven, who reports that missing drivers are anything but exceptional, is in a good position to know: he’s Steven Sinofsky, the company’s senior vice president responsible for Windows.

Their remarks come from a stream of internal communications at Microsoft in February 2007, after Vista had been released as a supposedly finished product and customers were paying full retail price. Between the nonexistent drivers and PCs mislabeled as being ready for Vista when they really were not, Vista instantly acquired a reputation at birth: Does Not Play Well With Others.

We usually do not have the opportunity to overhear Microsoft’s most senior executives vent their personal frustrations with Windows. But a lawsuit filed against Microsoft in March 2007 in United States District Court in Seattle has pried loose a packet of internal company documents. The plaintiffs, Dianne Kelley and Kenneth Hansen, bought PCs in late 2006, before Vista’s release, and contend that Microsoft’s “Windows Vista Capable” stickers were misleading when affixed to machines that turned out to be incapable of running the versions of Vista that offered the features Microsoft was marketing as distinctive Vista benefits.

Last month, Judge Marsha A. Pechman granted class-action status to the suit, which is scheduled to go to trial in October. (Microsoft last week appealed the certification decision.)

Anyone who bought a PC that Microsoft labeled “Windows Vista Capable” without also declaring “Premium Capable” is now a party in the suit. The judge also unsealed a cache of 200 e-mail messages and internal reports, covering Microsoft’s discussions of how best to market Vista, beginning in 2005 and extending beyond its introduction in January 2007. The documents incidentally include those accounts of frustrated Vista users in Microsoft’s executive suites.

Today, Microsoft boasts that there are twice as many drivers available for Vista as there were at its introduction, but performance and graphics problems remain. (When I tried last week to contact Mr. Shirley and the others about their most recent experiences with Vista, David Bowermaster, a Microsoft spokesman, said that no one named in the e-mail messages could be made available for comment because of the continuing lawsuit.)

RelatedMicrosoft's E-mail Messages (pdf)Text of Plaintiff Complaints (pdf)Text of Microsoft's Response to Plaintiffs (pdf) The messages were released in a jumble, but when rearranged into chronological order, they show a tragedy in three acts.

Act 1: In 2005, Microsoft plans to say that only PCs that are properly equipped to handle the heavy graphics demands of Vista are “Vista Ready.”

Act 2: In early 2006, Microsoft decides to drop the graphics-related hardware requirement in order to avoid hurting Windows XP sales on low- end machines while Vista is readied. (A customer could reasonably conclude that Microsoft is saying, Buy Now, Upgrade Later.) A semantic adjustment is made: Instead of saying that a PC is “Vista Ready,” which might convey the idea that, well, it is ready to run Vista, a PC will be described as “Vista Capable,” which supposedly signals that no promises are made about which version of Vista will actually work.

The decision to drop the original hardware requirements is accompanied by considerable internal protest. The minimum hardware configuration was set so low that “even a piece of junk will qualify,” Anantha Kancherla, a Microsoft program manager, said in an internal e-mail message among those recently unsealed, adding, “It will be a complete tragedy if we allowed it.”

Act 3: In 2007, Vista is released in multiple versions, including “Home Basic,” which lacks Vista’s distinctive graphics. This placed Microsoft’s partners in an embarrassing position.Dell, which gave Microsoft a postmortem report that was also included among court documents, dryly remarked: “Customers did not understand what ‘Capable’ meant and expected more than could/would be delivered.”

All was foretold. In February 2006, after Microsoft abandoned its plan to reserve the Vista Capable label for only the more powerful PCs, its own staff tried to avert the coming deluge of customer complaints about underpowered machines. “It would be a lot less costly to do the right thing for the customer now,” said Robin Leonard, a Microsoft sales manager, in an e-mail message sent to her superiors, “than to spend dollars on the back end trying to fix the problem.”

Now that Microsoft faces a certified class action, a judge may be the one who oversees the fix. In the meantime, where does Microsoft go to buy back its lost credibility?

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.