I’ve been talking to a lot of people about Dell and the current state of desktop/laptop computing. In particular, my friend Phil and I were talking to some Amazon.com engineers and they brought up the sad fate of Gateway. Gateway was in the same position Dell is now, maybe ten years ago. They ruled the computer desktop market and didn’t look like they were going anywhere soon. Now, many people don’t even remember what Gateway sold. So why won’t Dell go the same way as Gateway?
I don’t know much about the internals of Dell or anything about their business strategies but I can make a few assumptions based on what they’ve released publicly:
- Dell has recently undergone a huge hierarchal restructuring.
- Probably as a result, they are hiring some 300 interns this summer.
- They are taking huge steps away from Microsoft by publicly supporting Linux.
As I’ve said before, desktop sales are so huge right now largely because of Windows. Windows makes people believe they need a new computer every year. Hardware companies, like Dell, love this because it makes people by new computers from them. Now people are starting to wise up and realizing it’s their software causing the problems and not their hardware, people are going to want to replace Windows.
The executive team at Dell has obviously realized this because of the potentially risky steps they’ve been taking. Microsoft can’t be happy that Dell won’t be exclusively Windows anymore. Also, as Mark Shuttleworth pointed out, it could potentially cost a lot of money to provide support another OS. These hesitations have both been taken care of. Dell doesn’t care as much about Microsoft anymore because the customers don’t care about Microsoft as much anymore. Also, Dell’s given information about their support plan for Linux: they wont support it.
From the Dell site:
Majority of survey respondents said that existing community-based support forums would meet their technical support needs for a tested and validated Linux operating system on a Dell system.
This is huge! A new model has been unveiled. It used to be such that Microsoft made Windows and it was up to the hardware companies to get Windows to work on their computers and provide support for it. Microsoft would charge hardware companies to put Windows on their computers and the hardware companies would lose money providing support for Windows! Again, as Mark Shuttleworth said, the margin for hardware sales was extremely thin because of this software oriented sales model. The way it will work with Linux is completely different.
The sales model with Linux, as Dell has just exposed, will have the Linux vendors providing support for Linux. Also, Dell won’t have to pay to sell Linux on their computers! Of course, people will buy less computers with Linux because Linux doesn’t trick people into thinking their computer is broken but also, there will be a much larger margin for the hardware vendors!
Dell is on their way to cutting out the middle man (Microsoft) and in return, making computers better and cheaper for the consumer. Support will also be better because instead of the hardware company providing support for the software, the software company will!
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