Microsoft has lost its grip on the ecosystem

David Meyer ZDNet.co.uk

Published: 30 May 2008 16:07 BST

Microsoft has lost its grip on the ecosystem

Microsoft is the company everyone loves to hate. There are a number of reasons for this, but the greatest is the company's sheer dominance. Like a government, Microsoft takes flak because its presence is unavoidable.

This dominance is the product of Microsoft's influence over its partners, but Redmond is starting to lose its grip. At least three key manufacturers — of chips, PCs and handsets — in the ecosystem have wriggled free. Microsoft, used to leading others, is increasingly finding itself being led places it doesn't want to go.

The first sign came out of the 'Vista Capable' lawsuit, when previously confidential uncovered emails showed what Intel seems to have done to Microsoft just prior to the launch of Windows Vista. Intel wanted to stick its 915 chipset into new PCs and Microsoft wanted to do the same with Vista — the problem was, the 915's embedded graphics capabilities could not handle Vista's flashy Aero interface.

Nonetheless, Intel managed to convince Microsoft that 915-bearing machines should get the 'Vista Capable' sticker. Intel sold its chips, and Microsoft took a battering from users who quickly established that their new PCs could not handle Vista as promised.

Intel's low-powered Atom chipset has not helped Microsoft, either. Designed for the popular new breed of low-cost subnotebooks, the chipset is a very bad match for Vista, so — like the senior detective just days away from retirement in many a bad cop movie — Windows XP had to be called back into service for one last mission. Microsoft desperately needed to get rid of XP to boost sales of its unpopular successor, but this plan seems to have been foiled for now.

The Atom, of course, is a bet Intel made before the new subnotebook market was kicked off by Asus. When the laptop manufacturer meekly showed off its little Eee PC — originally intended to be an educational device — in early 2007, it did not expect the reaction it received: the device became instantly popular and spawned myriad competitors. Intel's bet looks like paying off in unexpected ways, while Microsoft is set to lose just as heavily. Microsoft must wish that the involuntary persistence of XP was its only problem in this market, but it's worse than that — like the first iteration of the Eee, most of these subnotebooks come with Linux-based operating systems.

Even though Microsoft has managed at least to get Windows onto many of the subnotebooks, all the devices thus far revealed come in both flavours, with the Windows flavour being either more expensive or...