Dell has a long history - regularly documented in these pages - of not
quite getting behind Linux on the desktop. Dell Linux machines do pop up
every now and again, but what desktop efforts there are find themselves
first consigned to obscure corners of the operation, then disappeared,
no doubt because of lack of demand. Why is this? One can surmise that
Dell's closeness to Microsoft has something to do with it, but one now
has less reason to merely surmise, because Linspire CEO Michael
Robertson has broken cover with a few claims, and a few numbers.
Microsoft soft money "kickbacks", he estimates, could account for up to
$200 million, "or more than 25 per cent of Dell's profitability."
Writing in his regular email to Lindows/Linspire users, Robertson gives
two examples of what happens to Dell-related Linux efforts. "Dell
recently invited two top executives from Linspire to give some
presentations about desktop Linux. They wanted to know where it's at and
where it's going. We confirmed meeting dates, attendees and flew our two
executives to Austin. Higher up Dell executives found out about these
meetings the day before and abruptly canceled them."
He also cites the Questar case,
<http://www.theregister.co.uk/2004/07/07/dell_vs_questar/> where an
attempt to sell Dell computers with Linspire preinstalled was, he says,
cancelled at the behest of Dell US executives.
Par for the course? But what is it that makes Dell do this kind of
thing? Robertson puts forward some interesting numbers. The antitrust
deal between Microsoft and the DoJ requires that Microsoft sell Windows
to the top 20 PC OEMs at the same price, thus theoretically removing the
possibility of sweetheart deals. But the sale price isn't necessarily
the effective sale price. Says Robertson: "Microsoft gives kickbacks to
vendors based on the number of computers they sell. Estimates of these
range from $2-$10 per computer. Dell also has a sweetheart deal on
Microsoft Office licensing which gives them a competitive advantage over
other OEMs, helping them win the pricing game. (The anti-trust ruling
did not address Microsoft Office pricing.)"
Dell also gets Microsoft money for recommending Windows XP under the
Market Development Program (MDP), which gives it three different sources
of money where it's beholden to Microsoft's goodwill. Robertson
estimates that could average out at $30 per computer, which on Dell's
base margins would be enough to make any exec sit up and take notice.
Robertson concludes from this that there's no chance of Dell leading the
charge to desktop Linux (sure as hell not with Linspire after this
little effort, Michael), and optimistically says the break is going to
come via companies chasing Dell and looking for a competitive advantage.
But if he's even half right about the numbers, it seems inevitable that
Microsoft still has more than enough leeway to play the old PC company
favourites game the DoJ deal was supposed to put a stop to. Which means
it'll be pretty difficult for any of the major PC companies to break
free.
(http://www.linspire.com/lindows_michaelsminutes_archives.php?id=131 The
Entire Roberson Email here)
-Gel
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