Microsoft's own analyst warned about Vista, low-cost laptops

He read the tea leaves correctly, but nothing changed

More than two years before Microsoft extended Windows XP's lifespan so makers of new low-cost laptops could install the operating system, a company analyst had warned that Vista's "harsher" system requirements might mean trouble, according to internal e-mails.

The messages were among the hundreds made public by a federal judge two months ago, in a case where consumers have accused Microsoft with misleading PC buyers with its "Vista Capable" program in the months leading up to the operating system's release. Recently, that judge suspended the lawsuit while another court hears Microsoft's appeal of the decision to grant the case class-action status.

In early 2006, Gregg Daugherty, an analyst in Microsoft's hardware group, told Windows marketing executives that the personal computer market was skewing toward less-expensive laptops. "We all know laptops are growing, but I'm struck by the magnitude, especially in the home," said Daugherty in an e-mail on Feb. 28, 2006.

"I'm especially taken by the fact sub-$1,000 laptops are now 50 percent of the home laptop market, and in Dec.'05, accounted for 26 percent of all retail computers sold," he added. Daugherty sent that message and others to a list that included Mike Sievert, then the head of Windows marketing, and Brad Goldberg, who was general manager of Windows product management at the time.

Daugherty followed with a list of questions for the marketing team that revolved around the shift in sales to notebooks and Vista. Among the most pointed was one about Vista's hardware specifications.

"Aren't system requirements for Vista on laptops harsher than today, when XP Home works easily on these low cost models?" Daugherty asked.

Later the same day, Daugherty wrote another message, this time to an expanded list of recipients. "I may be wrong on the sys requirements, but I believe XP didn't have the same constraints we'll see in Vista AND we've never before had the ultra cheap laptop phenomena going on," he said.

Several replies to Daugherty's questions were among the insider e-mails unsealed by US District Court Judge Marsha Pechman in February. For the most part, executives dismissed his concerns, although Sievert confirmed Daugherty's suspicions that Vista's hardware requirements were going to be more demanding. "Yes esp on memory," Sievert said in response to the analyst's question. "This is true for both [Vista] home premium and home basic."

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