July 7, 2004

Commentary: Why Dell is scurrying to cover its tracks in Linspire deal

Author: Chris Preimesberger

It doesn't take a genius, or even Smarty Jones, to figure out what's been happening in the hallowed halls of Microsoft Corp. and Dell Computer the last few hours. A bit of background, for those new to the situation: Linspire and Dell Italian channel partner Questar jointly announced that they are making available pre-loaded Linux desktop computers at a fair price.

It's very simple: Questar is the salesman, Dell the manufacturer, Linspire provides the OS. What's wrong with that? Sounds like a good capitalist partnership deal to us. It provides a product desperately wanted in the desktop market. It's also creating jobs internationally; Questar is in Italy, and Dell's facility in Ireland will put everything into the box and ship it to anywhere in the world.

Lots of people think this is a very good deal. Questar reported today that since the announcement at midday yesterday, its Web site has recorded more than 200,000 hits. You can bet a lot of those will turn directly into sales.

But apparently not everybody is happy about this. Microsoft also reads the news every day and isn't exactly pleased. The company acknowledges this is a serious threat to their 93 percent of the desktop OS market, and they don't want seeds of any kind like this to be planted. Gotta protect that market share at all costs. So now the spin battle begins.

Microsoft does not want anybody to know that it is now possible to buy on line a name-brand Dell computer pre-loaded with Linux (Linspire 4.5) and OpenOffice, bundled with three years of Dell hardware support and one year of the Linspire software catalog. You can buy it now for under $1,000, and have it shipped from Ireland in a few days -- or however long it takes Dell to build it.

Here is what we believe happened this morning, after the announcement hit all the media outlets today:

  • The phones at Michael Dell's office in Round Rock, Texas started ringing early this morning. "Check the Caller ID! Why, it's from Redmond, Washington! Hmmm. Wonder who that could be?" (The conversation is too graphic to publish here, but perhaps you can imagine it.) Click.

Mere minutes later, the phones start ringing at Questar's offices in Italy. "Hello? Oh hi, Dell. How are you, partner? ... Have a good Fourth? Good. Hmmm. Oh, I see. Yeah, we have been getting a lot of calls all of a sudden. Well, we didn't tell any lies with our press release ... You say you want a different spin. You want us to say we are configuring the machines? But we don't do that. We're just salesmen. You guys build the machines ... ok, well, we'll see what we can do. Ciao." Click. Shrug.

Okay, so here is the result of those conversations.

NewsFactor: "Dell Sets Linux Story Straight."

Silicon.com: "Dell Denies Linux Installation."

Geek.com: "Linux on Dell in Europe."

So, the Microsoft "backroom directive" we talked about earlier today is starting to play out publicly. Nice to watch corporate America in action like that.

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