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Gates memos show how Microsoft puts screws on Intel

And they suggest that the OEMs will only jump when Microsoft tells them to

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Threats? What threats? Bill Gates' claims that Microsoft was just trying to discourage Intel from wasting its money on NSP (see Intel writes lousy software, says Gates) took on an increasingly hollow ring as emails from the Great Man himself clearly indicated something entirely different -- if this was not pressure, then it becomes exceedingly difficult to explain. It is agreed by all parties that Microsoft did not want Intel to pursue NSP, a software technology Intel wished to add to its CPUs -- the dispute is over why Microsoft didn't want NSP, and what steps it took to stop it. So a key Bill Gates email from October 1995 says: "Intel feels we have all the OEMs on hold with our NSP chill," and that they wouldn't go with it "unless we say it is okay." Gates also seems to indicate some form of linkage here, saying that Hewlett-Packard wasn't going to optimise its machines for MMX or "the new audio software Intel is doing using Windows 95, unless we say so. This is good new because it means the OEMs are listening to us". That of course begs the question of what Microsoft was saying to the OEMs. Clearly it was saying NSP was a dead duck, but was it so because it was rubbish, as Bill's video testimony said yesterday, or because Microsoft was going to make it into one? From Microsoft's point of view, one of the issues was territory -- Intel did the hardware, Microsoft the software, so Gates says he "kept pushing Andy [Intel boss Andy Grove]... that we are the software company here, and we will not have any kind of equal relationship with Intel on software". This fits into the picture too, because if Microsoft regards software as its turf, then it will feel free to exercise a right of veto over any software technology Intel, the hardware company, starts working on. It's unlikely that the precise nature of any transaction that took place between Grove and Gates will ever be known, because the partnership still has importance to both parties, and despite Intel exec Steve McGready being used by the DoJ as a star witness, Intel still claims neutrality in the antitrust case. But there's some evidence of the kinds of conversation that were going on between the two. Grove asked why Microsoft hadn't yet agreed on an intellectual property sharing framework for Merced, and Gates said of this: "We were distracted by the NSP crisis -- making sure no one ships that pile of problems." So a hint of linkage, perhaps? In his testimony yesterday, McGeady said he didn't know what happened between Gates and Grove, but that Microsoft's attitude had the net effect of slowing innovation, and that this was bad for consumers. NSP, he said, would make the computer "sing and dance", and would have allowed Windows machines to play video without "the Max Headroom effect, with jerky video". But whenever Intel tried to mess with software, he said, Microsoft went crazy. This leads us to the nub of the problem, and to the beginning of the breakdown in the relationship between Microsoft and Intel. Their joint efforts had served to define the PC standard as a combination of hardware and software, with Intel defining the hardware and Microsoft the software to go with it, but increasingly Intel was chafing over the slowness and inadequacy of Microsoft software development. The PC9x documents list whole strings of innovations that have been delayed or derailed by Microsoft not actually arriving on time with the software support. USB drivers didn't show until Windows 98, meaning that whole generations of machines have ports nobody's using, and the continuing absence of NT 5.0/Windows 2000 is impeding numerous Intel schemes, in addition to having contributed greatly to the failure of NetPC. Intel's view therefore seems to be that Microsoft is calling the shots as to how fast the industry is developing, and that it's only going to be allowed to do so at the speed that suits Microsoft. Meanwhile, an irate Intel source responds to yesterday's Gates claims that Intel software stinks. "Hey, if Software Stan thinks Intel's software is so crap, how come 18 of the major enhancements in Windows 98 were written by er, Intel?" More details when Hardware Stan's anonymous source tells us what they were. ® Complete Register trial coverage Click for more stories Click for story index

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