By Nick Patience in Washington
The key period during which the relationship between Microsoft Corp and Intel Corp became strained was the run-up to the launch of Windows 95, which eventually happened towards the end of August 1995. And the key source of conflict between the two companies was Intel’s development of the set of multimedia system-level software that went under the banner of native signal processing (NSP). In a nutshell, from evidence produced at the antitrust trial this week it seems that Microsoft felt it already had the graphics and sound bases covered in Windows, and therefore, Intel should just accept it and cease its NSP efforts. In an email from Bill Gates to his senior executive team, documenting a three-hour meeting he had with Andy Grove on July 5 1995, Gates said: The main problem between us right now is NSP. We are trying to convince them to basically not ship NSP. Gates claimed in the email that Grove felt bad about a number of things about NSP, namely that is only fully supported Windows 3.1 and that the bad feelings between the two software groups means they are reluctant to work together since they [Intel] think we will crush it. Intel VP Steve McGeady, who took the witness stand this week was centrally involved in the development of NSP. He claimed that it failed because Microsoft called the PC manufacturers and bad- mouthed the project, resulting in a lack of adoption. Microsoft did an analysis of the NSP software in June 1995 and accused it of many things, including not supporting Windows 95 or NT. It also accused it of using half a megabyte of RAM and significant CPU cycles, all of which McGeady admitted were true. Microsoft offered to provide support for the audio and Intel’s real-time scheduler in future Windows 9x and NT releases. However, McGeady reacted to that in court Tuesday, calling it Microsoft’s we’ll pay you tomorrow for a hamburger today policy. He said Microsoft always said to Intel whatever you want, we’ll do it in the next release. The NSP software worked on a beta of Windows 95, but it had not gone through quality assurance testing yet, and therefore Intel did not want to release it at he time of Windows 95’s launch. Gates said in his email that as a result of his meeting, I believe we will see somewhat less pressure from Intel to ship NSP broadly this year but they want to ship it in h1 96. It will take a major effort for us to convince them to back off. But convince Intel it did, and Grove later admitted to his executive that Intel had caved in the face of Microsoft. Gates said, one point I kept pushing to Andy is that we are the software company here and we will not have any kind of equal relationship with Intel on software. It seems Grove got the message. Microsoft will continue its cross-examination of McGeady this morning (Friday).
