The Color of Microsoft’s Money

IMAGINE for a moment that someone gave you $5 for each desktop PC in your organization that was running a Microsoft operating system such as Windows XP. Not bad, I reckon.

The more PCs your company had, the more money you would rake in. Well, that’s called a kickback, and it’s probably illegal. If it isn’t illegal, it could ruin your reputation, and your co-workers might even beat you up. But that’s exactly the kind of relationship Dell appears to have with Microsoft.

Michael Robertson wrote about this in his Sept. 2 column at www.linspire. com/lindows_michaelsminutes.php.

According to Robertson, it’s estimated that Microsoft pays Dell anywhere from $2 to $10 for each computer Dell sells that has Windows XP installed.

And you thought the U.S. Department of Justice had rapped Microsoft over the knuckles so that it would plav nice and offer each of the top 20 manufacturers its operating systems at the same price.

Well, it’s not too surprising that Microsoft figured out a work- around. Microsoft pays computer makers based on the number of computers they sell, sort of like an incentive program, thereby getting around the agreement it signed with the Justice Department.

OK, I know, this is just business, and Robertson’s complaint sounds like whining. But the advance of Linux as an alternative desktop operating system is being hampered not because of technology but because of a sweetheart deal between the giants of the hardware and software markets.

This business relationship is putting the brakes on innovation. It’s a severe impediment to millions of people trying Linux. And it’s costing you money.

Robertson says that when two top executives from Linspire (yes, he’s the CEO of that Linux vendor) went to visit Dell to talk about what’s new in open-source, Dell executives canceled the meetings at the last moment.

Dell sold desktops with Linux installed from 1998 to 2001. And the company still offers workstations and servers with Red Hat Linux. But that’s a far cry from actually making it popularly available.

Microsoft also pays Dell if the computer maker recommends Microsoft Windows XP Professional. I found the recommendation on almost all of the Web pages I visited at Dell’s site. Why does Dell tie its fortunes so closely to Microsoft? Because the deal makes Dell lots of money.

Is Windows really the best operating system available? Haven’t we moved beyond being spoon-fed bundled software? I’d rather be allowed to make that judgment than have a supplier offering products without disclosing that it gets paid to push particular operating systems or software.

Of course, Dell could just pass that Microsoft money on to all the IT and purchasing departments at large corporations.

I bet that money could buy plenty of machines and even tutorials so workers could then install Linux themselves. 49271

PIMM FOX is a London-based journalist. Contact him at pimmfox@pacbell.net.

Copyright Computerworld Inc. Sep 13, 2004