Dell, prisoner of the Beast of Redmond

Linspire chief lashes out


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, 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. (Robertson's email in full) ®

Related Stories:

Dude, you've got selective amnesia!
Microsoft killed Dell Linux - States
Overcharging for Windows: how MS may beat the rap


Other stories you might like

  • Did ID.me hoodwink folks about its IRS facial-recognition tech, senators ask FTC
    Biz tells us: Won't someone please think of the ... fraud we've stopped

    Democrat senators want the FTC to investigate "evidence of deceptive statements" made by ID.me regarding the facial-recognition technology it controversially built for Uncle Sam.

    ID.me made headlines this year when the IRS said US taxpayers would have to enroll in the startup's facial-recognition system to access their tax records in the future. After a public backlash, the IRS reconsidered its plans, and said taxpayers could choose non-biometric methods to verify their identity with the agency online.

    Just before the IRS controversy, ID.me said it uses one-to-one face comparisons. "Our one-to-one face match is comparable to taking a selfie to unlock a smartphone. ID.me does not use one-to-many facial recognition, which is more complex and problematic. Further, privacy is core to our mission and we do not sell the personal information of our users," it said in January.

    Continue reading
  • Meet Wizard Spider, the multimillion-dollar gang behind Conti, Ryuk malware
    Russia-linked crime-as-a-service crew is rich, professional – and investing in R&D

    Analysis Wizard Spider, the Russia-linked crew behind high-profile malware Conti, Ryuk and Trickbot, has grown over the past five years into a multimillion-dollar organization that has built a corporate-like operating model, a year-long study has found.

    In a technical report this week, the folks at Prodaft, which has been tracking the cybercrime gang since 2021, outlined its own findings on Wizard Spider, supplemented by info that leaked about the Conti operation in February after the crooks publicly sided with Russia during the illegal invasion of Ukraine.

    What Prodaft found was a gang sitting on assets worth hundreds of millions of dollars funneled from multiple sophisticated malware variants. Wizard Spider, we're told, runs as a business with a complex network of subgroups and teams that target specific types of software, and has associations with other well-known miscreants, including those behind REvil and Qbot (also known as Qakbot or Pinkslipbot).

    Continue reading
  • Supreme Court urged to halt 'unconstitutional' Texas content-no-moderation law
    Everyone's entitled to a viewpoint but what's your viewpoint on what exactly is and isn't a viewpoint?

    A coalition of advocacy groups on Tuesday asked the US Supreme Court to block Texas' social media law HB 20 after the US Fifth Circuit Court of Appeals last week lifted a preliminary injunction that had kept it from taking effect.

    The Lone Star State law, which forbids large social media platforms from moderating content that's "lawful-but-awful," as advocacy group the Center for Democracy and Technology puts it, was approved last September by Governor Greg Abbott (R). It was immediately challenged in court and the judge hearing the case imposed a preliminary injunction, preventing the legislation from being enforced, on the basis that the trade groups opposing it – NetChoice and CCIA – were likely to prevail.

    But that injunction was lifted on appeal. That case continues to be litigated, but thanks to the Fifth Circuit, HB 20 can be enforced even as its constitutionality remains in dispute, hence the coalition's application [PDF] this month to the Supreme Court.

    Continue reading

Biting the hand that feeds IT © 1998–2022