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As odd as it may seem for a company that just announced it would offer the Ubuntu Linux distribution on selected consumer PCs, the server side of the house at Dell has climbed on board with the controversial Microsoft-Novell Linux deal of last November. Here’s the press release:
Microsoft Corp. and Novell Inc. today announced that Dell Inc. is the first major systems provider to join the business collaboration that was formed by Microsoft and Novell in response to customer demand for greater interoperability and intellectual property (IP) assurance. As part of the agreement, Dell will purchase SUSE Linux Enterprise Server certificates from Microsoft and establish a services and marketing program to migrate existing Linux users who are not Dell Linux customers to SUSE Linux Enterprise Server.
No financial terms were announced. While interoperability is universally beloved like motherhood and apple pie, it’s the pesky “intellectual property (IP) assurance” that is the problem here. The implication that Linux infringes Microsoft patents drives the open source crowd wild and Dell has just thrown away all their open source good will for reasons not immediately clear. Novell needed the money badly, but what’s Dell’s excuse?
When the first reports surfaced last week that a number of big name IT companies (including Microsoft) had participated in widespread kickbacks on US government contracts, it wasn’t clear to me exactly how Microsoft was allegedly involved. Today, the details are a little clearer in Lorraine Woellert’s report at Business Week. First the big picture:
With some big players already named in lawsuits alleging a widespread kickback scheme, the information technology industry will see further scrutiny as federal prosecutors pursue additional charges in coming weeks. Last week, the Justice Dept. filed civil charges against Hewlett-Packard (HPQ), Sun Microsystems (SUNW), Accenture (ACN), and Accenture subsidiary Proquire as part of a two-year investigation involving potentially billions of dollars in government procurement projects.
The Justice Dept. unsealed complaints Apr. 19 in U.S. District Court for the Eastern District of Arkansas in Little Rock, charging the four companies with fraud and conspiracy in their attempts to win lucrative government contracts. Prosecutors also made public six whistleblower lawsuits that had been filed under seal in September, 2004, by former Accenture employee Norman Rille and Neal Roberts, a onetime partner with Deloitte & Touche who has investigated alliances between technology vendors.
The lawsuits accuse at least a dozen technology vendors of operating rebate and commission programs, referral systems, and strategic alliances that they kept secret from the government agencies that bought their systems or followed their advice. The practice has been going on in some cases for a decade, the lawsuits claim. The Justice Dept. is seeking treble damages plus civil penalties.
There are more details in the article, but the problem is with the payment of referral fees which aren’t uncommon or illegal in many business situations, but have to be disclosed on government contracts. The way the fees were so visibly institutionalized at these companies indicates to me at least that they didn’t understand what trouble they were getting themselves into with the government. Where’s a lawyer when you need one?
As for Microsoft:
According to court documents, the original six civil cases Rille and Roberts filed will proceed against Cisco Systems (CSCO), Electronic Data Systems (EDS), SAP (SAP), Lockheed Martin (LMT), Oracle (ORCL), American Management Systems, CACI International (CAI), SeeBeyond Technology, and Dell (DELL). At least five other defendants remain cloaked under court seal, including one identified in court documents as a wholly owned subsidiary of IBM (IBM).
Boeing (BA), Raytheon (RTN), Microsoft (MSFT), SAIC (SAI), and Exostar were named in the original complaints, but the court, at the urging of prosecutors, dismissed them from the cases last week. The lawsuits themselves describe a network of relationships that reads like a Who’s Who of the nation’s biggest IT companies. Based on documents and information he received while a senior manager at Accenture, Rille claims in one of the original lawsuits, “all the major systems-integration consultants and technology vendors were and are engaged in the same kickback scheme and associated conspiracies.”
So Microsoft isn’t on the hook right now, but they and a number of other big names still seem to have a significant risk. I wonder if it will rate a footnote in tomorrow’s quarterly report?
With apologies to the Dell Dude, what better way to title the news that Dell will be offering PCs with Linux preinstalled:
Since launching Dell IdeaStorm [Dell's new customer suggestion site - ed.] a little more than a month ago, one idea has risen to and stayed at the top: better support for Linux.
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Dell has heard you and we will expand our Linux support beyond our existing servers and Precision workstation line. Our first step in this effort is offering Linux pre-installed on select desktop and notebook systems. We will provide an update in the coming weeks that includes detailed information on which systems we will offer, our testing and certification efforts, and the Linux distribution(s) that will be available. The countdown begins today.Many of you posted comments to our Direct2Dell blog, indicating that you were less concerned about a specific distribution than you are about support at the kernel level and open driver support. We are working on this too, and you can read more about our efforts in today’s Direct2Dell post.
You may recall that Dell rather tentatively offered kludgey “open source” PCs back in 2005, but this seems like it will be the real deal with full support. It’s not like they don’t have experience – back in June of last year, Dell claimed that 25% of its servers ran Linux.
You may recall an odd device under development by Microsoft that caused a stir in early February when it was mistaken for a Zune phone. Well, it’s back in the news and may cause even a bigger stir as John Letzing explains at MarketWatch:
When Microsoft Corp. delivers a mysterious prototype for government testing this coming week, it will mark a crucial juncture for a high-stakes bid to change the way consumers get their Internet access.
That bid has cast Microsoft and a group of powerful allies from Silicon Valley in the relatively unfamiliar role of Washington policy players.
Microsoft’s prototype, delivered on behalf of the group, is a wireless device that could provide the public with free and more widespread access to the Web instead of relying on networks owned by big telecom and cable firms.
That breakthrough, tapping into an unused part of the nation’s airwaves, is politically charged because it threatens to shift the Internet-access business away from telecom and cable companies that are historically well-connected in Washington, throwing open the field to a brand new batch of competitors.
It all hinges on how well the prototype performs in tests by the Federal Communications Commission. Microsoft and allies must prove that such devices, which can connect users via unlicensed portions of the nation’s wireless spectrum known as white spaces, won’t interfere with airwaves that major license holders acquired for large sums. While the FCC is obligated to protect license holders from such interference, several “white spaces” bills introduced in Congress have placed added pressure on the commission to wrap up the tests in a hurry.
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Analysts say that if the white-space group succeeds, consumers could see a flood of new devices enabling them to bypass the networks of incumbent service providers like AT&T Inc. and Verizon Communications Inc. to get online. White spaces, which sit between bands used for TV, could theoretically be licensed; but the tech group is explicitly pushing to allow unlicensed use — or use similar to picking up WiFi signals at a cafe.
The group lined up with Microsoft includes Google, HP, Dell, and Intel which, while mighty in the tech world, are novices in the corridors of power compared to the telecoms and cable companies. The opposition is already on the case as well they might be:
“The telephone companies are terrified they’ll lose 40% of their wireless minutes, because you’ll be able to connect from work or home and bypass their wireless networks,” said J.H. Snider, research director of the wireless future program at the New America Foundation, a Washington-based policy institute that has long advocated to allow use of white spaces.
There’s much more in the full article, but the FCC has until July to complete testing and may decide on the matter by October.
