What Role Does Linux Play in Microsoft's End of the Dell Deal?

by Ostatic Staff - Feb. 06, 2013

This week, there is much buzz surrounding Dell Computer going private in an expensive deal for which Microsoft has contributed $2 billion. Microsoft and Dell, of course, have been close partners since the birth of the personal computer industry, and much of the rise of the Windows operating system came from early hardware partners such as Dell bundling Windows on computers.

Today we have a new personal computing landscape, though, and some are asking if Dell's move to go private was driven by fear of Linux. Was that Microsoft's prompt for dropping $2 billion when the company rarely drops that kind of money?

As Computerworld notes:

"Microsoft's $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."

"The investment could help Microsoft ensure that Dell doesn't drift toward Linux-based operating systems such as Chromebook or Android, said Al Hilwa, program director at IDC."

As we've noted many times, Dell has consistently delivered more types of systems pre-loaded with Linux than other major PC hardware makers.  The company currently offers Linux servers and an XPS 13 laptop with an Ubuntu OS aimed at developers.

It is unlikely, though, that in its deal with Microsoft, Dell agreed to be shackled in terms of what operating systems it can pre-load on its systems. If Microsoft does exert any pressure on Dell regarding Linux, what would matter most to the company would be servers, where Linux is a phenomenon. Preston Gralla makes this point in a follow-up Computerworld column:

"Where Linux matters is in servers, and that's where Microsoft will try to influence Dell. Microsoft's server and tools group has become a mainstay of the company. Increasingly, Microsoft is an enterprise-focused company, and that's where its growth will be. Last year, for example, the server and tools group had $18.7 billion in income, up from $16.7 billion the year before. That's where Linux is a dangerous competitor."

Indeed, it's not lost on Microsoft that cloud computing is emerging as a major trend, and that and other trends are likely to prompt increased server purchasing over the next decade. If Microsoft has anything to say to Dell about allowable platforms, it will be on the topic of Linux on servers.

Dell has positioned itself to become a bigger player in the cloud, and in services. From that perspective, especially in a virtualized technology world, the company can't leave Linux behind. It wil be very interesting, though, to see what the new, private Dell looks like.