Dell-Linux: Is the Target Windows or OS X?


Dell's decision to certify Novell's SUSE Linux for use with its desktops and laptops is clouded in mystery right now, as PC World reports. The Texas company is at pains to point out that it isn't necessarily offering Linux with its desktops and notebooks out-of-the-box, but certifying the Linux OS for use with its products.

With Vista not exactly creating a storm - yet - Microsoft needs Dell right now. And it also needs HP and the many other firms and white box makers that run its OS on their machines. But the relationship is interdependent: Dell and Co. need Windows to run on their machines, as OS X isn't available for licensing, while consumers and business have been slow to adopt Linux - on the desktop at any rate.

Yes, Dell does offer Linux installs for some of its corporate customers, but critical mass hasn't been achieved. The biggest desktop *nix distro is Mac OS X. Of course, it's well-known Michael Dell said some years ago that Dell would sell OS X if Apple would only license it. Which tells us (a) he doesn't want all his eggs in one basket; and (b) why sell only Microsoft software when what you sell is hardware and customers want choice?

Now Mac buyers, in general, wouldn't touch a Dell with a barge pole. but if Linux on cheap Dell desktops and laptops took off, it could have serious implications, and not just for MS.

First, Linux can be marketed as a secure OS, unlike Windows. But just like OS X. Second, the world's servers run Linux, so no compatibility problems there. Third - and this is the biggie - Linux costs a chunk of change less than Windows to buy.

If you're thinking, 'what has this got to do with OS X?', think again. Dell is already # 1 in US education markets. if schools can get Dells even cheaper because the Linux distro is cheaper than the education volume license, that might well mean fewer Windows machines in K-12 and colleges.

But it might also mean fewer Macs.

The issue for Dell is that Michael & Co. live in a market diametrically opposed to the one inhabited by Microsoft. Dell drives prices on hardware down, down, down. Conversely, Redmond - as Vista proves - is dependent on an inflationary price model that ensures revenue growth in a market that has virtually reached its quantitative limits (i.e., when you own 95% of the installed base, where's your growth going to come from?).

Something like SUSE Linux could help Dell drive prices on its hardware down even further - and drive volume up. Cutting out Windows OEM fees means Dell could offer a box more cheaply - it may be 'only' $50 here, or $100 there, but it all adds up when you shift tens of millions of them.

The tightrope Dell is walking is risky: because it doesn't want to sour the OEM relationship with MS, which can make life difficult for PC vendors. But it does come back to the interdependent relationship the PC manufacturers and MS have: they need each other.

But Dell may be just big enough to avoid antagonizing MS and break out Linux on the desktop big time - finally. And that would be a serious competitive challenge to both Microsoft and Apple.