Why Dell is selling Linux again
Exploring aimlessly or moving with purpose?
As news is revealed that Dell is releasing not one but three new laptop models preloaded with Linux, the conventional wisdom that the Linux desktop and the desktop in general may be in decline is getting turned on its ear.
When Dell announced its two new business-class laptops, the Precision M4700 and M6700 devices, yesterday, they included the option to come loaded with Red Hat Enterprise Linux instead of Windows 7. This adds to Dell's Linux inventory, joining the recent addition of the XPS 13 Project Sputnik developer's laptop loaded with Ubuntu that's coming this fall.
Now, as happy as I am to see Dell expanding its Linux desktop offerings--and I really am--the cynic in me is stepping back to try to figure out why. While Dell has never reported sales numbers of its Linux devices, they've not exactly boasted even in general about them. (To be fair, Dell hasn't always boasted about its sales, period.)
In the broadest of terms, there may be quite a bit of "what the heck, let's try it" going on here. After all, there doesn't seem to be a price differential on the two Precision laptops between the Linux and Windows versions, so Dell probably figures they can get the same amount of revenue (if not more) from selling a few RHEL machines on the side.
The pricing for the XPS 13 Ubuntu machine isn't available yet, but I suspect that its pricing may not adjust for the lack of "Microsoft tax."
Here's the thing: I think that this goes beyond just a "see if it sticks" attitude. I think Dell may be trying something more clever, and the clues lie in how these devices are marketed.
First, the Precision machines. These are business laptops, through and through. Business users are probably going to be more likely to want a RHEL machine, particularly those who are security-conscious. But then there's something I heard on the Microsoft earnings call last week.
According to Bill Koefoed, Microsoft's general manager of investor relations, sales of business Windows PCs were up by 1%, consumer PC sales fell 2% in their fiscal fourth quarter. Other remarks in the call implied that Microsoft was expecting this trend to continue.
If Dell sees this trend (that's tongue-in-cheek; they are the trend), then it would make sense for them to stick a Linux option into their business product line. As glitzy as the upcoming Windows 8 is, no one is sure how quickly businesses will be to adopt it. Given the emphasis Microsoft is putting on the mobile friendly features, which businesses don't care about, I'm betting not very.
Dell may be seeing this writing on the wall, too, and they are hedging their bets to get business customers who want to move away from Windows 7 and into something else.
As for the Sputnik machine, I think some of this is purely geek-driven by team members within Dell's internal incubation program.
"Project Sputnik is a great example of the employee-driven innovation we built Dell's incubation program to enable," said Nnamdi Orakwue, executive sponsor of the Dell incubation program and executive assistant to Michael Dell in the press release last week.
But here's a crazy idea: given that this will be very much a developer's machine, I have to wonder if Dell is testing the waters to see if it can't catch a little of the hacker/coder fever that's pervading through the open source community.
Between efforts and focus on HTML5 web apps; big data MapReduce and Java; and the DIY culture that's exploding around the Raspberry Pi, Dell may be looking at a developer customer base that could finally be on the rise. If that's even remotely possible, why not put a Linux-loaded developer machine out on the market?
Granted, the XPS 13 is no Raspberry Pi in terms of affordability, but as cool as these mini-PCs are, they still have limitations especially for people who still like their computing devices self-contained.
If Dell were to price the Sputnik machine low, they might be able to tap into a strong market here.
Two different reasons, but Dell may be playing for the bank shots here. Given how hyper competitive the market is today, the best shots are often the trickiest.
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