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Microsoft's Dell Play: Smart Save or Nokia 2.0?

Microsoft's Dell Play: Smart Save or Nokia 2.0?

"When I first heard that Dell was going to go private, I had hopes that this might be an effort to get away from Microsoft's control, but those hopes were dashed pretty quickly when I saw that Microsoft itself was investing 2 billion in the venture," said Linux Rants blogger Mike Stone. "Now it looks like Microsoft is being even less subtle about its OEM manipulation."

By Katherine Noyes
02/14/13 5:00 AM PT

It's no secret that partnerships involving Microsoft tend to make Linux bloggers nervous, and given the lessons of history, it's not exactly any wonder, either.

So FOSS fans will have to be excused for the anxiety with which they've watched Microsoft's deal with Dell.

"Michael Dell has teamed up with investment firm Silver Lake to buy computer maker Dell, the company he founded as a 19-year-old in 1984, in a deal valued at about US$24.4 billion," began a NetworkWorld report last week.

Sounds innocent enough, right? As one might expect, however, it wasn't long at all before the plot thickened considerably.

'The Growing Influence of Linux'

First was the tidbit that Microsoft was involved in the deal with a $2 billion loan.

Then came the interpretation.

"Microsoft's US$2 billion loan to Dell is a sign that the software maker wants to influence hardware designs in a post-PC world while protecting itself from the growing influence of Linux-based operating systems in mobile devices and servers, according to analysts," a follow-up article reported.

Did the Slashdot masses have any thoughts to share on the matter? You bet they did, and it came faster than the proverbial rabbit on rollerskates.

'A Shotgun Approach'

"Microsoft's battle is not with Linux," began Slashdot blogger Taco Cowboy, for example. "Rather, Microsoft's future battle is with the smartphones and the tablets and all other new wearable form factors of computing.

"Ballmer is waging a shotgun approach of computing war -- trying anything and everything -- because the guy has no idea what to do now," Taco Cowboy added.

Then again, "You can't be in the server business and not support Linux," suggested Anonymous Coward. "You can't be in mobile and not support Linux, unless you're Apple. Pee Cee's? I'm not sure they matter to the fate of Linux any longer.

"But feel free to squander that bit of your Linux customer base, if you wish," Anonymous Coward added. "This is just some tech writer generating page views."

Down at the blogosphere's Broken Windows Lounge, Linux Girl got an earful.

'It Is Totally Expected'

"Dell has not been a good friend for Free Open Source Operating Systems," offered Google+ blogger Gonzalo Velasco C. "Traditionally they sell only a few models, and not top ones, with one Linux distribution (Ubuntu), and for a price almost equal to the Windows version, that is supposed to have the cost of the license included.

"Their site shows in more than one place: 'Dell recommends MS Windows...,'" he pointed out.

"Now the company was bought by the founder (nothing against) with a good 2 billion loan from whom? Microsoft," Gonzalo Velasco C. added. "If this is not going to lead Dell into a less Linux-friendly policy, what should it be, then!?"

The underlying reality is that "MS is [losing] market steadily in the last years, both for Linux OS on PCs and Macintosh machines with their Mac OS X, even before the Windows 8 fiasco," he concluded. "So, it is totally expected to see some fight from them, securing the market and the monopoly they have been building."

'Microsoft Is Right to Be Afraid'

Indeed, "when I first heard that Dell was going to go private, I had hopes that this might be an effort to get away from Microsoft's control, but those hopes were dashed pretty quickly when I saw that Microsoft itself was investing 2 billion in the venture," Linux Rants blogger Mike Stone agreed.

Now it looks like Microsoft is being even less subtle about its OEM manipulation," Stone added. "It's looking like Windows 8 is such a stinker that Microsoft is having to go to extreme measures to keep their OEMs from venturing outside the fold."

Actions speak louder than words, as the old saying goes, and "Microsoft continues to talk a big game as if Windows 8 is a great success, but their actions say that they're very afraid or losing their market dominance," he concluded. "Even a stopped clock is right twice a day; Microsoft is right to be afraid."

'That Might Be a Bigger Lure'

Google+ blogger Kevin O'Brien hopes that Microsoft's motivation is "to try and slow down Linux -- what better proof do we need that Linux is winning?" he asked Linux Girl.

Still, "I am not 100 percent certain that is the major motivation here," O'Brien admitted. "Microsoft is probably looking at Apple as well, and Apple controls the entire platform, software and hardware, and has done very well.

"Microsoft has moved into hardware in the tablet market, and is currently blaming OEMs for the relative failure of Windows 8," he pointed out. "That might be a bigger lure for them than Linux."

'The Tablet, Not Linux'

Similarly, "the Linux community somehow still sees itself as the greatest threat to Microsoft, but that is really far from the truth," Robin Lim, a lawyer and blogger on Mobile Raptor, told Linux Girl.

"Why worry about Linux as a potential threat, when Microsoft has already lost serious ground to other operating systems?" Lim added. "One in three personal computers shipped in 2012 was a tablet; one in five personal computers shipped in 2012 was an Apple machine; one in seven personal computers shipped was an Android Tablet or a Google Chromebook.

"Over the past three years, Microsoft's 90 percent hold on the 'Personal Computer' market is effectively down to less than 60 percent," he noted. "The biggest threat to Microsoft domination of the desktop in almost two decades is the tablet, not Linux."

That, of course, doesn't even include "the most common 'personal computer' in the world: the smartphone," Lim added.

'Very Little to Do With Linux'

In short, "the investment in Dell is probably like the investment in Nokia," Lim suggested. "Microsoft needs to hold ground, and feels that it needs some key hardware partners to do this.

"The last thing Microsoft wants Dell to do is to revive their Android based program and come out with its own Chromebook," he concluded. "But the investment in Dell is really more about pushing Windows 8, Windows RT and Windows Phone 8 products for the new generation of mobile personal computers. It has very little to do with the Linux powered Dell XPS 13."

In fact, perhaps for that very reason, "there are many doubts over the move raised by shareholders who don't want Dell to become Nokia 2.0," Google+ blogger Alessandro Ebersol pointed out.

'Its Willing Slave'

Consultant and Slashdot blogger Gerhard Mack, however, took a positive view of the move.

"In the end, I think this is a good thing," Mack told Linux Girl. "Dell no longer has pressure from investors to maximize profit at all costs, so we should see more long term planning where short term profits get sacrificed for the long term good of the company (which is the complete opposite of what shareholders usually want)."

Similarly, "the deal looks like Michael Dell buying the company when the stock dipped and M$ making an investment which will in the end allow Dell to innovate and even to profit from GNU/Linux," opined blogger Robert Pogson. "That is a lot more palatable for M$ than admitting to the world that GNU/Linux works.

"They can let Dell be its willing slave to develop GNU/Linux hardware and software and to take all the risks," Pogson explained.

"I don't think M$ can buy exclusivity for such a small investment," he mused. Rather, "it just buys another diversified revenue stream -- just what old money needs. If M$ cannot compete, it can still invest and live off its income for decades to come."

'Honestly, Who Cares?'

In any case, "if Microsoft ever tried to coerce Dell via the loan terms to drop Linux support, I think Dell could get a lot more than $2 Billion in court," Chris Travers, a blogger who works on the LedgerSMB project, pointed out.

Last but not least, Slashdot blogger hairyfeet wasn't sure the question even matters.

"Honestly, who cares?" hairyfeet said. "It's two badly managed companies getting together so they can be badly managed as a pair."

Microsoft "refuses to listen to its customers, who have made it quite clear that if they wanted an Apple tablet they'd have bought an Apple tablet, and no matter how many times Ballmer clicks those ruby slippers together and says, 'there is no place like Cupertino, there is no place like Cupertino!' making a lame copy of Apple just isn't gonna fly," he explained.

'The Magic Word Is Fail'

Windows has "a completely different demographic than those that buy the latest iStuff," hairyfeet pointed out. "And as for Dell, they've been wedded at the hip to Intel and MSFT almost since the day the company began; all this will do is kill their Ubuntu offerings, which frankly weren't that great to begin with and didn't sell well."

Meanwhile, "everybody from Asus to Toshiba will be sitting down to talk to Google about ChromeOS and Android," hairyfeet predicted, "because instead of accepting that Windows users DO NOT WANT their PC to behave like a cellphone and giving the OEMs more Win 7 licenses to sell, they are playing the blame game and demanding the OEMs spend an insane amount of money making tablets more expensive than Apple's because Windows is not a 'premiere brand,' to hear Ballmer tell it.

"Yeah, tell that to the OEMs with warehouses full of unsold Ultrabooks," he added.

"So, at the end of the day, Dell going private changes nothing," hairyfeet concluded. "They'll continue pushing whatever MSFT tells them to, will continue bombing, and until Steve 'Forbes worst CEO' Ballmer gets punt kicked like a 30-yard field return, the magic word at MSFT is gonna be 'fail.'"


Katherine Noyes has been writing from behind Linux Girl's cape since late 2007, but she knows how to be a reporter in real life, too. She's particularly interested in space, science, open source software and geeky things in general. You can also find her on Twitter and Google+.


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