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Dell No Longer Selling Systems w/o Microsoft OS 1159

Some Sys Admin sent in an email that he got from Dell which basically says Microsoft will no longer allow Dell to sell PCs without an operating system. Please note that Microsoft is not a monopoly, and does not use their monopoly power to squish competition in the market place. The message itself is attached below, and is worth a read, especially the last bit.


1. Effective 8/26 - New Microsoft contract rules stipulate that we can no longer offer the "NO OS" option to our customers beyond September 1st. As such all customers currently purchasing a "NO OS" option on either OptiPlex, Precison or Latitude for the express purpose of loading a non-MS OS will have the following options:

1. Purchase a Microsoft OS with each OptiPlex, Precision or Latitude system.

2. For OptiPlex and Precision - purchase one of the new "nSeries" products (offered for GX260, WS340 & WS530 - details in the attached FAQ) that are being created to address a different OS support requirement other than a current standard Microsoft OS.

We must have all "No OS" orders shipped out of the factory by September 1st. The "No OS" legend code and SKUs will be I-coded on 8/19 and D-coded on August 26th to ensure shipment of orders prior to September 1st. FYI - this effects all of our competitors as well.

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Dell No Longer Selling Systems w/o Microsoft OS

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  • Monopoly (Score:4, Interesting)

    by Rosonowski ( 250492 ) <> on Saturday August 10, 2002 @01:21PM (#4046137)
    Interestingly enough, I was trying to explain this same concept to my father no longer then an hour ago. I'll have to show him this note.

    He seems to beleive that "they just make the better product, so people buy it. That's why they are so big. Not because they're an evil company"
    • Re:Monopoly (Score:4, Funny)

      by Hitokage_Nishino ( 182038 ) on Saturday August 10, 2002 @01:39PM (#4046322)
      He's right in a way. When you only have one item to pick from, you can be sure that you picked the best one.

      On the other hand, some would say it was the worst one. ;)
    • Re:Monopoly (Score:3, Insightful)

      by Tim Macinta ( 1052 )
      He seems to beleive that "they just make the better product, so people buy it. That's why they are so big. Not because they're an evil company"

      Just like McDonald's sells the most burgers in the world because their burgers are so much better than anywhere else.

  • Fine with me (Score:3, Redundant)

    by corebreech ( 469871 ) on Saturday August 10, 2002 @01:21PM (#4046138) Journal
    I'm no longer buying systems that come with Microsoft OS's.
    • by phaxkolumbo ( 572192 ) <> on Saturday August 10, 2002 @01:23PM (#4046155)

      Duuude! You're so not getting a dell!

  • Just what is fraud anyway?

    Fraud is the use of a false or deceptive statement for the purpose of getting your money.

    Microsoft's lie that it is not a monopoly clearly qualifies as false or deceptive. And, they clearly have given it for the purpose of getting your money.
    • by dbrutus ( 71639 ) on Saturday August 10, 2002 @02:33PM (#4046661) Homepage
      Actually MS fraud would be more like their statement that their OSDN kits contain the complete Win32 API and that there are no secret API calls reserved for MS developers. That's an actual material fraud made over the course of several years and has changed the course of computing.

      A lot of people believed in that promise and it gave MS the largest ISV community on the planet. And it was all built on a lie, one that MS now claims it never made.

      What completely blows me away is that all the anti-MS people can't get their act together enough to document it and bring a class-action lawsuit based on it.
  • What do they mean? (Score:3, Interesting)

    by boa13 ( 548222 ) on Saturday August 10, 2002 @01:24PM (#4046161) Homepage Journal
    purchase one of the new "nSeries" products that are being created to address a different OS support requirement other than a current standard Microsoft OS. Are they talking Linux here, or what? Does anybody have a link to the mentioned FAQ?
    • by ajs ( 35943 ) <> on Saturday August 10, 2002 @01:40PM (#4046328) Homepage Journal
      What they mean is that they are going to go from offering "hardware A, available as model B, with option C" to "hardware A available as model D which is available only with option C"

      Bascially, the contract with MS says that they can't get the OEM price unless they sell the model in question with only MS products. So, they have to create another "model" which they ship without an OS. The obfuscation in the letter is designed to avoid outright saying that they're using the word of the contract against MS, so that MS can't say in court that Dell violated the contract in spirit (I'm not sure how defensible that would be, but if I were Dell, I'd avoid it too).
  • The way I see it, this message could (and probably will below) be read two different ways:

    Either Microsoft is acting all monopolisitc again, requiring all these fancy regulations, and just being plain evil, or,

    Microsoft is just not comfortable with no OS installed, which means that the user will have to 'find' an OS, that might just be Windows. Although they seem to be very vague, it's not like they're saying you can't get the OS you want.

    To add my own personal view, if it weren't for the "because of Microsoft Licensing" bit, it would seem to be a reasonable and sensible strategy. These 'Alternative OS' systems might be customized to used parts that have better driver support, etc.

    Anyways, let's watch the flame war begin....

  • You know.... (Score:3, Insightful)

    by JoeLinux ( 20366 ) <<moc.liamg> <ta> <xunileoj>> on Saturday August 10, 2002 @01:24PM (#4046167) Homepage
    M$ has always been brash...I think it's this type of charging at the US government that has always kept them off-kilter. That, and their large portion of the US economy has made the Government skittish about confronting their obviously Monopolistic tactics.

    All it's going to take is a young Attorney with the lack of political awareness to tell the Emperor that he has no clothes.

    So let's toast to the young an Naive. Personally, in a world where M$ can do this, I think drunk is a preferred state.

    Going Boldy where I surely don't belong,


    Eagles may soar, but weasels never get sucked into jet plane engines.
    • has made the Government skittish about confronting their obviously Monopolistic tactics.

      This isn't obviously monopolistic.

      This isn't even illegal unless you are a monopoly.

      And we all know that MS isn't a monopoly anymore, and probably never was.
  • You can still go to Powernotebooks. []
  • It's a shame... (Score:4, Insightful)

    by EraseEraseMe ( 167638 ) on Saturday August 10, 2002 @01:25PM (#4046174)
    The second the computer hardware industry gets over it's undying need to profit and destroy its competitors, it can finally do something about Microsoft. If they were all to tell MS at the same time "Hey, guess what, we're going to dictate the terms of what OS goes on our machines now", then MS would be up a creek without a paddle. Unfortunately, the likelihood of this happening is slim to nil, the second a large comp manufacturer did this, the others would go the other way and run to MS saying "Look at what CompStore2002 is doing! We won't do that, give us a break on the licensing!"

    Microsoft is using the greed of the industry against itself. Without hardware to run it on, software is useless, and Microsoft is useless. They are in a far more precarious position then they let on...Maybe it's time to give them a little scare
    • Re:It's a shame... (Score:4, Insightful)

      by cyberconte ( 156446 ) on Saturday August 10, 2002 @01:29PM (#4046217)
      The second the computer hardware industry gets over it's undying need to profit and destroy its competitors, it can finally do something about Microsoft

      Uhh... yea, thats the whole point of running a business, you know? to make money? Espeically publicly traded ones...

      Ironically, cooperation *not* to buy microsoft product could be viewed as illegal cooperation between companies. Funny that! I'll bet the'd be punished in 6 months with hefty fines, too.

      I'm not bitter. Really. -_^

    • by StandardDeviant ( 122674 ) on Saturday August 10, 2002 @01:39PM (#4046311) Homepage Journal
      undying need to profit and destroy its competitors

      Puh-leeeeeez. That's what corporations do. It is the corporate officer's duty to undertake whatever actions maximize stockholder benefit. Period, end of sentence. Offering health insurance? Stock options? Good pay? Those are all tools to maximize worker productivity. Understand, this is neither a good nor a bad thing in the moral/ethical sense. In the world of business, there is no right and wrong in the moral sense, only "right" as in following the law and making money. Look at it this way, if Dell did the "right" thing by standing up to MSFT and lost money or went out of business, is it morally correct that this action hurts Dell's stockholders and employees? Gordon Gecko may have been a loathsome character, but his "Greed is Good" speech is closer to the truth (in the ethical sphere of corporate reality) than many would like to admit.

      If you don't like the way business is run, then don't get a job at one. Start your own, give it the college try, and hope that you can look yourself in the mirror after ten years has turned you into that which you railed against as a young turk.

      • Re:It's a shame... (Score:5, Insightful)

        by gilroy ( 155262 ) on Saturday August 10, 2002 @01:53PM (#4046422) Homepage Journal
        Blockquoth the poster:

        In the world of business, there is no right and wrong in the moral sense, only "right" as in following the law and making money

        No. In the world of business we've had people saying "there is no right and wrong". They've been saying it loudly. They've been saying it monotonously. They've been saying it for, oh, about forty years in strength.

        But they're wrong. Just saying something doesn't make it so. Simply denying the existence of something doesn't in fact make it cease to exist. And failing to recognize the ethics of a situations doesn't mean there aren't any. We'e beginning to see the fallout in the corporate world when the basic principles of ethics and fair play are systemically violated...

        • by sterno ( 16320 ) on Saturday August 10, 2002 @02:37PM (#4046680) Homepage
          Despite all the rhetoric coming out of our government about how horrible this is and how we need a return of ethic to corporations, I'll be very surprised if anything really changes in the long run. The only real change I expect to see is stock holders will change the rules for their CEO's because it isn't in their long term best interest for a CEO to over-inflate his options and bail out.

          But as far as ethics in business go, there is only one ethic: make money. The system is set up to encourage a company to find the shortest path to greatest profitability, and that's the way it will likely always be. Is this bad? Depends on what you want companies to accomplish. If you want them to achieve economic growth, increasing efficiency, etc, then they are ideally groomed to do this (as our economy has demonstrated over the past decades). But don't expect any higher moral sense to come out of a company unless there is a profit motive behind it. It can happen, but the system isn't designed to encourage it.
    • Re:It's a shame... (Score:3, Interesting)

      by Fjord ( 99230 )
      The problem is that even if they did for an olipoly to combat microsoft's monopoly, they would lose. The fact is that 99% of the PC customers will want a microsoft OS. If Dell, HPaq, etc all say "we are going to sell these OSless systems whether you like it or not", Microsoft can still say "ok, you have to pay full price for windows" and then the customers of the PC makers will wonder why all the prices jumped $190 (I'm figuring $200 for XP-$10 for the OEM) for the same system they were going to buy a week ago.

      Going this way will cause strong pain for the PC makers, although would actually be better for the customers (they get to transfer their windows license to newer computers and can avoid the $200 next time) in the longish run.

      Personally, what I think the PC makers should do is invest in Wine development, either via codeweavers or more directly. When wine can reliably do 99%[*] of the programs out there, they'll have more of a barganing position. I'm not saying they should dump windows for linux (although if the compatibility is that high I don't see why not), but they need the real ability to threaten

      *: 99% actually probably being better than windows itself does, IME.
      • Re:It's a shame... (Score:4, Insightful)

        by JoeShmoe ( 90109 ) <> on Saturday August 10, 2002 @03:09PM (#4046845)
        The fact is that 99% of the PC customers will want a microsoft OS

        Hey buddy, are you sure about this?

        I mean...I'm only using Windows because it came free with my computer. Just WHAT IF all computer makers out there sold their PCs as is, with no fluff and preloaded software and OS?

        What if JoeConsumer (no relation) walked into a store and saw the retail price for XP? What if it was sitting there right next to Lindows which was 1/3 the price? What if the screenshots looks the same, the feature list looked the same, and hey look, the Lindows one comes with free Office-type software! It's $599 for the Microsoft version!

        Granted, a large portion of people want to play games, and well they might need a Microsoft OS, or not, it depends on the game. Granted, a large portion of the people know how to use Windows and want to keep it.

        But who is to say that if consumers didn't just automatically get the Microsoft OS for "free" when they bought a computer...they wouldn't want to try something a little more reasonable?

        - JoeShmoe

    • by sterno ( 16320 ) on Saturday August 10, 2002 @01:44PM (#4046368) Homepage
      They aren't using the greed of the manufacturers against themselves, but are using the slim margins that they operate on against them. Most of the large manufacturers are relying on large volumes with razor thin margins to make sales. If Microsoft isn't willing to give them the bulk licensing discounts, then this directly impacts the price of their products since no other part can be made any cheaper than it already is.

      If everybody stood up to Microsoft, then Microsoft couild say, "okay, fine, then none of you get discounts". Now, they aren't going to stop selling Microsoft products are they? So now their prices just went up by probably $50-100/unit. Suddenly some consumers who might have bought those low-end systems think the price is too high and stop buying. Microsoft isn't hurt by this in the short run because they'd be moving nearly the same volume but at higher prices. Then they make it known that when these hardware manufacturers get their act together they are more than happy to reinstate the terms from before.

      What are you going to do as a hardware manufacturer? Sue them? HAHAHAHA, yeah we saw how well that worked didn't we?

      If the hardware manufacturers are smart, they will slowly work to undermine Microsoft. Providing better support for Linux installation even if Microsoft rules are saying they have to sell with Microsoft pre-installed. Selecting hardware to go in their systems that actually works well with Linux, etc. Long term, their collective dependance on Microsoft is going to hurt the big manufacturers, while small players, will slowly take pieces out of their market share because they aren't hooked on MS.
      • by Malcontent ( 40834 ) on Saturday August 10, 2002 @07:30PM (#4048060)
        Ms is already entering the hardware market. Dell should be shitting in their pants thinking about a future where MS sells a closed, sealed PC (a la Xbox) with windows.

        MS could crush Dell in a week if it nescaped them. They would dump $200.00 PCs on the market for a year and Dell would die.

        Right now Dell is scared shitless because they don't know how to diversify and can't stop the inevitable entry of MS into the PC business.
  • by vex24 ( 126288 ) on Saturday August 10, 2002 @01:25PM (#4046178) Homepage
    I couldn't find a way to buy an OptiPlex, Precision or Latitude (or Dimension) from Dell without an MS OS before now anyway!

    The only machines I can get from them OS-free are servers, which works out in my situation since we use Windows on the desktop and Windows or Linux on the servers. I don't think this represents a major change for Dell, but it could spark enough interest to affect the outcome of the antitrust settlement.

  • by russianspy ( 523929 ) on Saturday August 10, 2002 @01:25PM (#4046181)
    Who cares?

    Microsoft is a company that understands their users, right? If I choose to simply boot out of a linux installation CD and NEVER access the windows partition or use any of those programs, they'll give me my money back. Right?

  • by egg troll ( 515396 ) on Saturday August 10, 2002 @01:25PM (#4046182) Homepage Journal
    While I agree this probably because MS has a monopoly, I doubt that 99% of Dell buyers would want anything besides Windows on their PC. So really the net effect is moot.

    Then again, maybe Dell was looking for a way to stop selling OS-less PCs without incurring the wrath of Linux-zealots, and chose to blame MS. I would not be suprised....
    • by sterno ( 16320 ) on Saturday August 10, 2002 @01:52PM (#4046416) Homepage
      Actually, the little notice suggests that Dell is actually having to create a seperate line of products to allow them to continue selling OS-less PC's. This is, of course, an additional expense for them, so clearly they want to continue to provide this option to people even at a greater expense to themselves.
    • by sbuckhopper ( 12316 ) on Saturday August 10, 2002 @01:53PM (#4046423) Homepage Journal
      While today your comment is true, its not true in the grand scheme of things.

      Yes today, the general consumer mob is sold on Windows, however the intent of this contract is not for today, it is for the future, and it is designed to help a monopoly stay a monopoly.

      Essentially what this is doing is squashing out any future innovator that may want to create a different operating system to run on a system that would run on the same system that Windows runs on. This takes away all competition in the future because it is never given the chance to have a foothold.

      A lot of people think that this is not practical (I am not one of those), no one is going to innovate something like that, but then again, look at Apple. Here is an everyday example of a company that's already got a superior OS ready to go. Other than Apple itself, there is really not a whole lot stopping them from releaseing OS X on other platforms.

      With strong arming like this going on, Apple has nowhere to go in the OEM Intel hardware business because Microsoft has already stomped out their chances of getting a contract with one of these companies. What it comes down to is an operating system doesn't just have to be superior to windows in order to take a market hold, it all ready has to have the overwhelming support of the people that are already using the hardware that the vendor is selling or the vendor logically will never accept this new contract.

      As it was sarchastically stated in the story, this, hands down, is one of the most basic definitions of a monopoly, or of how a monopoly stays a monopoly. It is sad and a perversion of the legal system that this company hasn't been brought down hard yet.
  • by mikael ( 484 ) on Saturday August 10, 2002 @01:26PM (#4046184)
    Remember BeOS? The new OS on x86 that got killed by MS. They couldn't get vendors to ship their systems dual boot with Windows and BeOS due to MS policy. I don't understand why Be (who still are in opreration with one employee :) uses this fact and goes to trial.

    Scott Hacker has a great column on this called He Who Controls the Bootloader []
  • and I will express my concern to them, although I know our computer purchases are only a small small fraction of Dell's total sales.

    I find it interesting that on the Small Business ws340 with Linux page, they mention that Dell PCs
    use Genuine MS products :)
  • What a stupid move on the part of Microsoft. Nothing would push the judge in the anti-trust case more towards the 9 dissenting states.

    Whos idea was this? The smart buisness move would have been to finish the settlement of their current anti-trust case, then lock down their vendors. By doing this now, they are asking for trouble.

    Typical Microsoft arrogance.
    • by Lewis Mettler, Esq. ( 553022 ) <> on Saturday August 10, 2002 @01:42PM (#4046346) Homepage
      This announcement will not have any affect upon the current litigation. At least not the case by the States.

      The reason is that all testimony has already been taken.

      It is just like the stupid decision by the appellate court that Microsoft did not try to monopolize the browser market. That was clearly incorrect but the court is strapped with the evidence in the case as of the testimony. And as of years earlier, Microsoft only acheived about a 50% market share. And, with those facts before the appellate court, you are likely to get such an opinion.

      However, when the AOL case gets to the jury, facts will be completely different. Then 90-95% will be evidence. Very different indeed.

      That is a basic problem with the legal system and it is why Microsoft lawyers can lie in public the way they do. Microsoft lawyers lie to the press and to the public based upon old facts that are clearly no longer relevant. But, to the ignorant, it is a sale.

      Funny, however, that Microsoft again starts to lie about having a monopoly.

      But, they are just a bunch of cheap liars anyway. They have proven that numerous times.

      Remember the idiot under oath who told the judge that SUNs JVM was not included with XP because of the GPL?

      And, remember the idiot that told the judge that Microsoft will withdraw from the market if it does not like the judgment?

      And, remember the three stouges that each claimed they thought removing icons had something to do with commingled code.

      Microsoft's lies are not even credable and yet they spit them out to defraud consumers. And, the judges as it turns out.

  • by Jose ( 15075 )
    do a google search for:
    coke pepsi exclusive contract

  • Right now get Dell computers at an insanely low price! That's right! We've been threatened by Microsoft and our loss is your gain! Get this 2 Ghz Linux box for only 599.00! Seriously, can we look forward to a sale since they have to be out by Sep 1?
  • BYOS! (Score:2, Informative)

    by DraKKon ( 7117 )
    Build Your Own System.. I assume that most /. geeks do anyway.. Generally people who can;t build thier own system will find linux hard to grasp anyway. Linux is cool, don't get me wrong, as (of a week ago) all of my systems run RedHat, but as stated on another /. story, how many of your moms run linux? Or your dopy blonde sister's run linux?
  • Ok I see this in two ways. MORE MS Monopoly, and

    Dell probably signed a sweetheart of a deal with MS for say 10 bucks per copy of OS they ship. However Dell has a built in per system cost for 50 bucks per OS into all builds. All companies do this, think you are getting a good deal on the car? They all make money.

    So Dell signs a sweetheart deal. Adds 40 bucks of profit for each PC sold. No brainer for the bean counters. Cause they already ran the numbers and saw Linux support would cost them for more than selling Linux PC's would make them. I bought a few Linux servers from them and had to reinstall as soon as I got em. But then again who doesnt with any os?

    MS still goes out on Dells as well. We should look at what the bennies are for Dell.

    Two Things.

    Dell says " 2. For OptiPlex and Precision - purchase one of the new "nSeries" products (offered for GX260, WS340 & WS530 - details in the attached FAQ) that are being created to address a different OS support requirement other than a current standard Microsoft OS."

    Ok so they are addressing the issue and selling systems with other OS options than MS. OK, so the above means you can still go non-ms on certain systems.

    I want to see the attached FAQ the email talked about before I start the barn burning.

    The whole story please.

  • This isn't so much about being a monopoly as it is being absurd.

    Sure, the business model seems to work fine.

    Microsoft says: "If everyone is using our operating system, we make lots of money".

    Dell says: "We sell a lot of computers using the microsoft operating system *anyway* - and in fact, they make up 90% of our business - so why argue? Let's just switch to 100% microsoft!"

    See, here's the problem. If Microsoft is the only company supplying operating systems to home users, we have no growth in the operating system market. People are content to see their system crash, people are content to pay 200 dollars more with their PC for an intangible piece of software which claims to be better than everything else.

    Sure, I like WindowsXP. I use it often, my machine dualboots XP and Redhat. But I like the option of booting redhat, and I like the option that Dell had previously given their customers.

    I wish dell would just say no. Dell, Gateway, the rest of them should form the same trust that microsoft has. If all the computer manufacturers got together and said, "You know what? We're not going to take this. From now on, you're slashing the price of your OS or no one is going to use it, because it wont be available for any systems." Microsoft would listen quick, or would call lawyers against the same type of bullying that they themselves do.

    Oh well. Another one bites the dust.
  • Here we go again (Score:4, Interesting)

    by starseeker ( 141897 ) on Saturday August 10, 2002 @01:29PM (#4046218) Homepage
    Well, this might mean any of several things:

    a) There has been some legal development in what's left of the legal arguement that we don't know about, but is distinctly in Microsoft's favor, and has made them more bold

    b) Dell might have decided that the "No OS" clause doesn't restrict them from selling Linux boxes, and along with other vendors allowed Microsoft to set these terms to get cheaper licenses. What Microsoft defines as "No OS" isn't clear, but Linux certainly isn't "No OS", at least here in the real world.

    c) Microsoft is becoming increasingly worried that the legal proceedings are not going well, and wants to get this new contract into effect before the judge forbids such moves

    d) Or the most likely of all - Microsoft is ignoring all legal and consumer issues and is being openly anticompetitive in order to milk the cash cow some more. Maybe they believe that if they act like the consumer doesn't and shouldn't give a rip about it, it will be true.
  • If you're a big corporate behemouth, your soul probably already belongs to Microsoft, so what the hell, buy Dell.

    Otherwise, you want to have another choice -- build your own damn machines and save a grand for each machine.

    Okay, so you want Linux and enterprise support... I hear IBM does the Linux thing. Why don't you give them a call.

    If Dell wants to cave to Microsoft, then consumers who really care will take their money to IBM or one of the independent vendors.

    In the meantime, does the Department of Justice read the newspaper? What are they thinking??!!


  • by M_Talon ( 135587 ) on Saturday August 10, 2002 @01:30PM (#4046225) Homepage
    *affecting a bad surfer accent* Dell, you're going to hell...

    Seriously, before we go off on a big spree about how Microsoft is bad and all that, let's keep in mind that Dell could have fought the licensing in court if they really wanted to. They could have used the precedent of Microsoft as a monopoly to tell them to fsck off. Microsoft could have tried to "punish" them, and Dell could have beat them down even further. There is/was a perfect chance to fight against the monopoly, but Dell just turned over and gave up.

    Yes we're all QUITE aware of how evil M$ is. I could rant about that for days, but here on Slashdot it's preaching to the choir. What I see here is a company (Dell) basically enabling that evil to thrive. Wanna boycott something? Boycott Dell and make them realize they should have fought back.

  • by Golias ( 176380 ) on Saturday August 10, 2002 @01:32PM (#4046242)
    Somebody with a hotmail account sent the slashdot editors an e-mail, claiming it was forwarded from Dell. Then they proceed to immediately put it on their front page. I suppose next they will post the one about how Mel Gibson once had plastic surgery to fix his broken & scarred face. Or maybe that a little boy who is dying of cancer wants to set the world record for getting the most post cards.

    Even if this is legit, is it really that big of a deal? Most Linux users know enough to ignore the "Dude, you're gettin' a Dell" dude, and build their own systems anyway.

  • by expunged ( 30314 ) on Saturday August 10, 2002 @01:43PM (#4046349) Homepage Journal
    It should probably be noted that this probably does not include PowerEdge servers. While I have never been able to figure out how to get an OptiPlex system without a Microsoft OS, I believe the servers will still offer the no-OS/linux OS option.

    I didn't receive the e-mail, but the snippet above does not mention servers and they are usually handled differently.
  • by EatenByAGrue ( 210447 ) on Saturday August 10, 2002 @01:43PM (#4046355)
    I see lots of angry condemations here - but this is actually very typical price negotiation. Microsoft didn't go to Dell and tell them they couldn't sell PCs with other OSes or they wouldn't sell them Windows any more. Microsoft went to Dell and offered them huge discounts to Windows if they signed an exclusive offer. Dell saw the dollar signs and agreed.

    Dell has done a pretty good job with their letter blaming MS...but MS would be ignoring basic business practices if it didn't offer and option like this. I'm sure Dell is happy with the deal and laughing all the way to the bank.
    • The problem is if a company is found to be an illegal monopoly this sort of agreement is no longer a "typical price negotiation" its predatory pricing among other things.

      If Dell signs an agreement with UPS to only ship UPS for a big discount this isn't the same thing because express shipping is a competitive market. Dell presumably before signing such an agreement would ask FedEx to make an offer. Dell shipping only UPS is not going to put FedEx out of business. If FedEx loses too many customers to UPS from this sort of deal they are going to start undercutting UPS.

      The situation in the PC industry is nowhere near the same. There is one OS vendor with over 80% of the market. A majority of PCs sold are made by just 3 or 4 vendors (Dell, HP, IBM, Toshiba). So for Microsoft to have an exclusive contract with all of the major vendors means Be, Apple, RedHat or whoever don't stand a chance of taking market share from MS.
    • This isn't news, Dhell has been doing this for a few weeks now. I was talking with some people on wednesday evening about this very topic.

      Dell has dropped all their OS-less machines, and now only offer machines with M$-OS pre-installed, at an increased price which can't be negotiated away. Even for their largest customers. Even for corporations with site-license agreements with M$. All because M$ used a carrot-and-stick approach, threatening to remove all discounts unless non-OS options disappeared, and offering a greater discount than H-Paq if they went with a 100% M$ offering.

      Dell is fucking freaked by the HP-Compaq merger, HPaq is a giant more scary than even M$. Although everyone in the press is laughing about the mis-match of HP and fuckPaq, Dell and IBM aren't laughing. H-Pucker is huge, and will (already started to) create a nasty price war in the corporate PC industry. One of HPricks competitors is going to go out of business, and you can be sure IBM will most likely survive. So M$ hit Dell hard in the negotiations a few months ago, and now we see the results; make every corp client pay twice for M$ products, or lose the war before even being able to fire a shot.

      Doh!ll caved in, and probably are spinning this to their share holders as a great oportunity to increase profit margins over HPhuq.

      The sad reality is that there are now lots of corporate clients on M$ license 6.0, where they have already paid per-seat/per-user/per-cockroach for copies of M$-OS. Then when they look at the $$$ amount from Dell, and the same spec machines from and IBM or H-dreck, the costs of that "Pay twice for your OS with every machine" are going to look pretty bad. Dell has phucked themselves over bad this time around, you can bet they aren't going to see any long term profits from this move. The boycott from a very tiny percentage of free-OS freaks isn't going to make a blip in their books, but 50K+ corporations jumping ship in the next 3 years will kill them.

      As a very astute industry insider predicted wednesday night over a few beers, "that bitch Carlie may have killed the old HP, but if she secretly carved up the PC market with Bill, then Dell has been doomed from the start"

      the AC
  • Scenario (Score:3, Insightful)

    by macdaddy ( 38372 ) on Saturday August 10, 2002 @01:49PM (#4046401) Homepage Journal
    Lets say that Firestone tells Ford that if they want Firestone's high performance special tire for a new Ford hot rod (only made by Firestone) Ford has to outfit their entire product line with Firestones. It's an all or nothing deal. What happens then? Bridgestone, Cooper, and all the other manufacturers sue. They'd probably win too. How come that doesn't work here? This just plain sucks.
    • Actually no.... (Score:4, Insightful)

      by sterno ( 16320 ) on Saturday August 10, 2002 @02:24PM (#4046622) Homepage
      To illustrate the monopoly issue here, what would actually happen is this. Firestone would tell Ford that they have to outfit everything with firestone tires. Then Ford would put out a bid to the other manufacturers to provide a replacement for Firestone's tire. One of them would undercut Firestone, if for no other reason, than to keep them from taking over Ford's tires, and that'd be that. This is what happens in a competitive market, unlike what we see in the O/S market.
    • Re:Scenario (Score:3, Insightful)

      1. Bridgestone == Firestone. Bridgestone is a subdivision of Firestone, a subsidiary started years ago to be an OEM for Ford.

      2. Try this one: Dell Computers contracts with UPS to deliver their boxen. Dell gets special pricing from UPS if they agree to only ship UPS. Same idea. Perfectly legal--matter of fact, that was their deal for a while. They only changed (and gave up some of their special pricing) after the UPS strike; they realized that putting all of their eggs in one basket like that was a risky move. But until that strike, they (quite legally) contracted with UPS, and only UPS, to deliver their machines, and they got a special deal for it.

  • by underwhelm ( 53409 ) <underwhelm@gmail.cCOLAom minus caffeine> on Saturday August 10, 2002 @01:50PM (#4046407) Homepage Journal
    Imagine the same action taken by a large publisher in the bookselling industry.

    Barnes and Noble: "Our contract with HarperCollins stipulates we can no longer sell blank journals or college ruled notebooks. Customers will have the following options:

    1. Purchase a book published by HarperCollins.
    2. Purchase a book published by another publisher.

    HarperCollins demanded this because we all know people don't use blank paper to write their own stories or notes, but to pirate their intellectual property.

    FYI-This affects all our competitors as well."
  • by hklingon ( 109185 ) on Saturday August 10, 2002 @02:03PM (#4046496) Homepage
    Okay, sure, the EULA on Microsoft stuff has a specific clause:
    If you do not agree to the terms of this EULA, PC Manufacturer and Microsoft are unwilling to license the SOFTWARE PRODUCT to you. In such event, you may not use or copy the SOFTWARE PRODUCT, and you should promptly contact PC Manufacturer for instructions on return of the unused products(s) for a refund.
    Except that it seems to be difficult, if not impossible, to get a refund. Almost three years ago, I replaced a dead NT server (lightning, so, no, just a few parts won't do)with a white-box Win98 machine and sent Win98 away to be refunded. I was told to send it directly to M$, by M$. I'm still waiting! A lot [] ofother [] people seem to be, too. It seems to be damn near impossible to get a refund, in fact []. And this the DoJ all heard before, as part of the anti-trust trial [] Also, it seems now that OEMS must "eat" the cost of returned copies of windows, this is no longer passed back to microsoft.

    Look, I'm not some fanatical Linux Zealot on the fringes of society. I'm a programmer, system administrator, IT manager, whatever you want to call it. I use Linux and other free OSs, and I really hate being treated like some psycho zealot on the fringe when I try to avoid doubly (and sometimes triply) licensing microsoft software for Clients' PCs. ("You want what? We don't do that? Whats a EULA?" HP, Compaq, Gateway and now Dell. its all the same.) I mean, honestly, where is my FTC? Where is my consumer protection? It goes beyond frustrating.

    • Hey (Score:3, Interesting)

      by inKubus ( 199753 )
      Microsoft only has about 35 billion dollars, and I believe their GDP is greater than that of Bolivia, or Uruaguay or something.

      Looking at this logically, they have all this money and favorable public support so there is no Political solution to the problem. People like Microsoft.

      So, a small number of us hate them, because we choose to not run windows. Welp, sorry to say, this IS a democracy (ok, *cough*) and the majority has spoken. Until the majority gives a fuck, nothing will change. You can lobby congress about the blah blah blah and this and that, but the bottom line is that M$ makes money for America, so it is a Good Thing. It puts money into the pockets of the shrinkwrapper at the factory and the needy Senator alike.

      But yes, it goes beyond frustration. Having to pay for something you don't use. Like, dammit, I had to pay for the spare tire in my car, but I've never had to use it. That's bullshit, I should never have to pay for it unless I use it.

      Guess what, you still have a choice. DON'T BUY DELL! You can get PC's without OS's on them from other manufacturers. Yes, the manufacturers will probably be hurt by MS's licensing requirements. SO WHAT! Buy from a open source only builder. Or build yourself. Or hire some college student to build for you for 10/hr!

      Or if it really has you that worked up, buy a gun, and shoot yourself, because MS isn't going away, the bastards.
  • by darksaber ( 46072 ) on Saturday August 10, 2002 @02:06PM (#4046515)
    VADER: I am altering the deal. Pray I don't alter it any further.
  • by alanjstr ( 131045 ) on Saturday August 10, 2002 @02:59PM (#4046789) Homepage
    I thought one of the stipulations of their settlement with the DOJ was that they wouldn't do that sort of thing any more.
  • by Advocadus Diaboli ( 323784 ) on Saturday August 10, 2002 @03:00PM (#4046796)
    Well, I'm working at a big computer manufacturer in Europe. My firm also is not allowed by MS to sell a PC without an operating system.

    The funny part is, that MS want's us to sell PCs with operating system and customers wants to get PCs without a preinstalled OS.

    My firm is solving this thing by just adding a SuSE-Live-Eval CD to any PC that is delivered with an empty hard disk. So the customer is fine since he doesn't have to pay extra "MS taxes" and MS can't complain since we are shipping every PC with an operating system.

  • by t0qer ( 230538 ) on Saturday August 10, 2002 @03:22PM (#4046930) Homepage Journal
    Dell makes great stuff, but hardly worth the price it fetches.

    I just slapped together a dual p4 xeon2.0ghz system for 2500. It has a gig of rambus, 80 gighd, DVD burner and a gforce4ti4200 something a rather.

    Dell only offered Xeons in the p3 flavor, similiar setup for around 800 dollars more.

    I used to be a sysadmin, I know all the service benefits dell gives (pre-imaged systems, 24hr on-site part replacement, ect) but I think if you compare the cost a network being admin'ed by dell with a sysadmin who just "makes calls to dell" all day to the cost of a network being admin'd by a sysadmin who maintains an inventory of spare parts, uses ghost or NT2k Remote installation services, and buys his/her parts from a local screwdriver shop I really do think you would see a huge difference.

    Parts don't really break that often, windows does. Especially outlook. Is there really a savings to pay for that dell "protection money"?

    If you're currently a sysadmin in charge of some large corporate network, speak with your dollars, not with your slashdot. Try and talk your company into standardizing on a single platform. Here let me spec out a good standard...

    Nvidia video (single unified driver = less driver headaches)
    Creative sound (the standard by which all follow)
    3com networking

    Other than the motherboards changing over the next few years you won't really need to do a lot of work to maintain these machines over the next few years. Be smart, implement home directories and tell everyone to put whatever they want backed up in there. That way you can wipe their machines without hassle.

    well, thats my 0.02. Wish I had caught the article sooner.
  • by redbeard_ak ( 542964 ) <.ten.puesir. .ta. .draebder.> on Saturday August 10, 2002 @03:27PM (#4046960) Homepage
    That's what I'm buying for my clients.

    Here's a link to one of their server config menus. []

    On the menu is Win2k, Netware and no OS. So MS doesn't have the strength to do this on servers as they do on desktops. That would be my conclusion, as they'll only do whatever they can for their own profit - consumers be damned.

  • Railroading (Score:5, Interesting)

    by Burning*Cent ( 579896 ) <baker@921.osu@edu> on Saturday August 10, 2002 @04:16PM (#4047228)

    I can't help but think about how MicroSoft is a monopoly-in-restraint-of-trade as bad as the American railroad ones of the 19th century.

    In the 19th century, railroad monopolies charged people fees for shipping on competing lines. The goal was that you only do business with one rail line. Microsoft's response to BeOS is much like this one. Microsoft, like the monopolistic rail lines, coerced its customers, the OEMs, not do business with a competitor. However, instead of charging imaginary fees as punishment, MS uses sealed OEM licenses to forbid them from installing dual boot OSes.

    However, I see why MicroSoft uses such tactics. If people got computers with Windows and BeOS dual boot or Windows and Mandrake Linux, people would actually realize that there's no reason to use only Windows.

    BTW, although not monopolistic or evil, MS's frequent changes to the Word format is like the railroad lines' stubbornness against choosing a standard gauge.

    On a personal not, this seems like it could have almost affected my situation. I recently bought a computer online from a NE Ohio computer company [] without an OS. I was planning on running GNU/Linux until I began studying at OSU, where I could get a legal copy of WinXP from a Microsoft club for $5. Of course, recent /. stories on EULA changes made me decide to use Win2k instead, and I bought a Like New copy through Unfortunately, Windows refuses to run because I have an "INACCESSIBLE_BOOT_DEVICE". I feel like using an illegal copy Windows if I can't get it to work.

  • Site License (Score:3, Interesting)

    by DustMagnet ( 453493 ) on Saturday August 10, 2002 @05:47PM (#4047644) Journal
    What bothers me most is that my work has a site license for many Microsoft products. They payed millions for this license. When I buy a Dell, we have to pay for Windows again.

    Yes, I don't have to buy Dell, but there are good reasons. For one, they are just down the street.

  • MS Ease of Use??? (Score:3, Interesting)

    by ericman31 ( 596268 ) on Saturday August 10, 2002 @06:26PM (#4047807) Journal

    I had an interesting experience just this morning. I have been a firm believer in a few things:

    • Proprietary UNIX operating environments like Solaris and AIX are, in all aspects, the best platform for back office services ... i.e. data warehousing, CRM, etc.
    • Linux based operating environments are the best platform for front tier platforms like web servers, app servers, file & print, etc. (especially using SAMBA, RH puts Win2K to shame!)
    • Windows, especially Win2K (XP isn't worth the $$$ to upgrade) is the best choice for the typical office user and home user.
    But, I've been wanting to try out Linux on a PC and see how much it's improved at the consumer level. So, I installed RedHat 7.3 on my IBM T20 laptop. I've had this laptop for nearly 2 years. I have a CD I built with all necessary Windows 2000 drivers on it. The machine came with Win98 and I didn't feel like getting IBM's Win2K, so I just used a generic Win2K installation that I own. I had to download about 20 IBM specific drivers and install them before the laptop worked "right". It functioned, but not well.

    So, I downloaded RH 7.3 iso's from NASA [] (blazing download speeds, over 1.7 Mbps) and burned the install CD's. I then popped CD #1 in my laptop and rebooted. In less than 1 hour my laptop was a functional dual-boot machine. I let RedHat make all the install decisions, rather than customizing like I would do on a server. I allowed GRUB to be my boot loader. It boots both Win2K and RH beautifully, no issues. RH runs great AND I didn't have to download one single driver to get my system to work with Linux. Win2K doesn't include support for my 2 year old network card, so I have to have that driver downloaded before attempting a Win2K install on this laptop, no such problem with RH.

    I'm a believer now. RH 7.3 is definitely ready for the average end user's PC. The installation is no more difficult than Windows, if you set it to boot to graphical logon mode life is easy. And once in Gnome (or KDE) all the tools that a typical end user might want are there. With about the same amount of effort that it takes to install Office XP that same user can download, install and use Open Office (that took me about 30 minutes).

    Best of all, I didn't have to use knowledge gained in 10 years of implementing and administering UNIX servers. It was pretty damn easy. To get the same easy installation with Win2K on a laptop I need to get the OEM version of Win2K appropriate to my laptop OR I can just get the generic RH distro. No issues, no worries, no compatibility problems.

    Bottom line, MS OS is no longer superior in the consumer market based on what I just saw, and the Linux price is hard to beat. For the user who doesn't want to deal with creating their own CD's they can pick up the boxed set of RH for a low price down at Best Buy. Within an hour they can have a functioning system that is equal to Windows. The only thing keeping it from going mainstream is games. Come on game developers. Get those games running on Linux and MS is in big trouble.

  • by Liquor ( 189040 ) on Saturday August 10, 2002 @08:12PM (#4048194) Homepage
    It's pretty easy to explain what this entails and why this is happening - I'll make a bet that the XP installs that Dell ships after the cutoff date won't need to be 'activated' through Microsoft, but will recognize the machine and bios as a 'licensed platform'. This effectively means that the OS license is built into the machine - so so Microsoft won't let them ship them without paying Microsoft.

    Ok, so maybe Dell will make a few machines ('n-series') that don't run Windows - but they're now a completely different machine. The previous court order stating that Microsoft cannot charge for every machine sold (regardless of OS) has now been circumvented.

    That's enough of a step backwards to behaviour already found to be illegal on it's own, but this seems to be the first step towards making manufacturers have to distinguish "Microsoft ready' machines from OS agnostic machines.

    A few more steps like this, differentiating Microsoft machines from the others, and it's a sure bet that the commodity hardware - 'Microsoft OS ready' machines - are going to be the much vaunted 'Trusted platform' - complete with a bios that will REFUSE to boot anything except a Microsoft OS.

    Yes, I'm paranoid about Microsoft's intentions. but I suspect that I'm not being paranoid enough.
    • Interesting thought...

      A bios extenstion that the OS can check to see if the machine is "MS approved/licenced"...

      Something that the OS can check for to allow the use of the OS on that machine and thus not require activation.

      Apple was able to do it with their ROM; this makes me wonder if MS is leaning towards the same path.... [they can patent the bios code that the OS checks for]... This is also interedting considering that other MB manufacturers have also been selling boards that contain a CF reader built in...

    • Too late... Here is the BS Dell sent me when I asked why Linux wouldn't run properly on my new Inspiron 2600 laptop. They locked the video ram settings to low, and made a M$ specific hack so only XP could run properly.

      Dear Ralph,

      Thank you for contacting Dell eSupport & Services. We appreciate the opportunity to assist you. It?s our hope that you have a positive experience with our company. Ralph, In our commitment to ensure a faster response to you, I will be handling this issue in the absence of the previous technician.

      Ralph, I understand your issue and would like to inform you that the configuration and allocation of video memory to particular applications is controlled by the operating system and cannot be set manually by the user, this feature is by design and even the newer BIOS has no option of manually setting the amount of video memory. I hope you understand.

      To ask another query or get assistance with a technical issue, mail us at Once again, thank you for choosing Dell.




      Monday - Friday, 6am - 2:30pm

      Dell e-Support and Services

      --Original Message--

      From: "Ralph"

      The problem is with that the BIOS software does not allow one to allocate more than 1mb of video ram. The display cannot be used to its full resolution without more video memory. According to Intel the problem is with the BIOS software
      and not their 830m chipset:

      "Intel is not responsible for the BIOS on any production Intel 830M/MG
      Please contact your system manufacturer for instructions on increasing the
      amount of legacy video memory set aside, if available, or for a BIOS update to

      change this setting."

      Dell is the manufacuer/vendor of the defective BIOS. Whom should I contact on fixing the BIOS video memory allocation error?

  • by toolz ( 2119 ) on Sunday August 11, 2002 @03:02AM (#4049484) Homepage Journal
    Fact - you can't sue a company for refusing to sell you something (or providing you service). If they refuse to deal with you, you can only go to the competition.

    Fact - The competition is also doing the same thing.

    Fact - You are locked out. You cannot buy a machine without paying financial tribute to Microsoft.

    In any other field/industry (telecom anyone?), this would instantly lead to class action suits.

    So how would you go about "generating" a class action suit?

    Here's the how-to:


    First, get yourself a class-action compatible lawyer. Don't worry about costs - you will incur none. Any law firm worth its salt will recognise the publicity value of this action.

    Coordinate with people across the country, and make sure that they have a legal representative with them when you do the following:


    1. On a pre-decided day (post Sep 1 - if that date applies to Dell, it will probably apply to all others aswell), have many individuals attempt to buy a PC without an OS from Dell, IBM, HP/Compaq, etc. Make sure that these are *individuals*, not *groups* - groups make bad class-action initiators, groups of individuals have the under-dog advantage, and besides, groups may put the "target" on alert (witness the anti-Microsoft tax day that effectively achieved *nothing*).

    2. Make sure *everything* is documented (in writing whereever possible, witnessed by a legal rep if on the phone or in a shop).

    3. Collate the unsuccessful experiences of *all* these inidividuals, cataloging experience with each computer company to show:

    a. Policy within the company in question

    b. The big picture - that this is an industry-wide phenomenon.

    At all times, keep in mind that the computer companies are as much victims as you are - keep that in mind.

    That's it. Let the lawyers take it from there. This is the stuff their wet dreams are made up of. Just make sure that thelaw firm gets plenty of publicity to:

    a. Encourage them to keep going

    b. Discourage them from backing out (either because they turn chicken or because the seniorpartners mysteriously start driving fancy cars).

    Remember this - like the cases against the tobacco industry, there is valid evidence there that what is happening is not good for citizens of your country. It will be a long battle, but with enough evidence out there, vote-dependant Government officials will begin to see the light, especially when they start losing elections. With that danger, they will clamour to bring this matter to justice, i.e. into court.

    And once in court facing the *people* (instead of purchasable commodities like senators), there is very little chance of victory for Microsoft (or anyone else who tries stunts like this).

Forty two.