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Dell founder invests nearly $100 million in Red Hat

Steven Parker   on 13 May 2005 - 12:57 · 42 comments & 2463 views

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The investment firm that manages the private fortune of Dell Inc. founder Michael Dell invested $99.5 million in Red Hat Inc., the world's largest distributor of the Linux computer operating system, according to regulatory filings. The investment by MSD Capital was the largest by any single company from a $600 million bond issue in January 2004. Raleigh-based Red Hat disclosed Dell's investment in an April 27 filing with the Securities and Exchange Commission.

Red Hat spokeswoman Leigh Day and MSD spokesman Todd Fogarty declined to comment Tuesday on Dell's investment.

Earlier this week , markjensen linked to an article about Microsoft's Steve Ballmer and Red Hat's Matthew Szulik meeting back in late March. Does this latest news further anyone else's suspicions that Microsoft is shopping for a top name corporate driven linux distro to buy in order to compete with Novell's purchase of Suse? Consider that shares of Red Hat are almost down to their 52 week low, and it makes me think that we'll soon be seeing Microsoft Linux on the retail shelves.

News source: MSNBC

Neowin member shanepitman contributed to this article


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(4 replies) #1 Ficman on 13 May 2005 - 13:12
That's a lot of scratch...
#1.1 TheLittleKid on 13 May 2005 - 14:37
Its not alot of money for microsoft, it makes sense for microsoft to get into the linux game....there is money to be made and why cant microsoft be the one making it?

And this is the best part, when they start writing their own linux distro they will modify the code so much that the linux programmers wont be able to keep up with the code changes...it will be impossible. Then all the linux guys programming will quit because it will be to much work and no longer fun. CHECK AND MATE!!! This is the genius of microsoft, this is why I own their shares.
#1.2 eAi on 13 May 2005 - 16:31
Doesn't this just mean that Microsoft Linux would be not adopted by any developers and would fail miserably? Anyone can take linux and modify the code as much as they want, but its not always in their interest.
#1.3 Treefrog on 13 May 2005 - 17:13
QUOTE
Doesn't this just mean that Microsoft Linux would be not adopted by any developers and would fail miserably? Anyone can take linux and modify the code as much as they want, but its not always in their interest.


Thats the way I read it. Regardless, (again this being all speculation regardings MS + Linu MS would have to send back to the community any changes that were done to GPL'd software (read.. the vast majority). I think it's kinda funny, in a way.. Red Hat is considered by many Linux users as the "MS of Linux" anyways, and their system of package management, rpm, is the source of the vast majority of headaches for users (rpm hell, roughly equivelent to dll hell). If this were to happen it could be a boon for Debian and Slackware. I'm certainly not going to lose any sleep over it hehe.

As far as "all the linux guys programming will quit because it will be to much work and no longer fun", not gonna happen. If anything, it will be a massive rallying of the troops, and THAT will be entertaining to watch .
#1.4 skinnyjm on 16 May 2005 - 03:06
Whatever,...it means MS doesn't take care of their buddies forever.
Hard Ball always rears it's ugly head.
(1 reply) #2 xxdesmus on 13 May 2005 - 13:39
did anyone else read this about a week ago?
#2.1 twyst3d on 13 May 2005 - 18:42
yea for once slashdot had the news before anyone else did, neowin dont become the next slashdot (old outdated updated last)
(3 replies) #3 triad_man on 13 May 2005 - 14:02
I don't see why Microsoft would buy a Linux distro. If they wanted into the maket they have more than enough talent on hand to crank out their own. But why on earth would Microsoft want to compete with itself. (two OS's on the market)
#3.1 Colonel_Angus on 13 May 2005 - 14:08
QUOTE
I don't see why Microsoft would buy a Linux distro.

They wont.

I saw this cooperation coming a while ago, but then again I'm a lot smarter than most other posters on neowin

With Intel and IBM building virtualization on the CPU, the question will no longer be "What OS will this computer run?", the new question is "How many copies of Windows 2003 and how many copies of RHEL would you like to run on that CPU simultaneously?"
#3.2 Siebe on 13 May 2005 - 14:09
They get the money either way. If you buy Windows they do, if you buy RedHat Linux they do. It's a win win for Microsoft. And they get to have some marketshare in Linux world while setting up their own they will have to fight their way into Linux first. How many Linux consumers would be prepared to install a microsoft Linux distro? How many would be prepared to install RedHat? (given the fact that they wont put "Microsoft" all over the place)?
#3.3 triad_man on 13 May 2005 - 15:43
Well you are assuming they could sell their Linux distro. If they put out a good distro that was useful in the server segment they would have to price it at 0 and sell support. This would greatly detract from the Windows 2000/2003 server line profitability.

If they sell a decent desktop distro they would have to price it very low. ($30?) to compete with the likes of Linspire and SuSe while at the same time making is superior to the free ones like Debian, Ubuntu, and Fedora. If they do that then the are going to be detracting from there sales of Windows XP Home/Pro. Not to mention there flagship product Office will not run on Linux without WINE or the like.

I just don't see how they make money on the deal. I understand what one of the above posters said about learning to interoperate with Linux. I think Balmer even mentioned it at WinHEC. I still don't see them developing their own brand of Linux. Maybe some API's or interoperability tools or the like.
(1 reply) #4 Frankenchrist on 13 May 2005 - 14:11
Hehe, that sure would ruin linux reputation as a good alternative to windows, putting a 'buggiest' distro online... Oh the joy/agony
#4.1 Treefrog on 13 May 2005 - 17:20
That's ok, simple fact is people tend to stay away from the buggier Linux distros . There is still a wonderful choice of non-buggy distros to choose from, take your pick. RH is popular, but I certainly do not consider it the best, in fact I will not use any distro that uses their package manager. I don't have time for that kind of nonsence.
(6 replies) #5 Avi on 13 May 2005 - 14:42
Sure, $100 million... why not? I wish I had $1000 in my bank account. Lame rich ppl... lame economic system...
#5.1 kad.au on 13 May 2005 - 15:12
viva la revolution!!
#5.2 B-52Stratofortress on 13 May 2005 - 15:28
Yes, really lame thing this individualism and things like individuality, creativity, innovation, art, self-reliance and individual freedom.
Viva la collectivism, let's follow in the great footsteps of great leaders like Hitler, Stalin, Mao and Pol Pot.
You don't like individualism and personal independence - fine, just leave me and all those who value individual liberty the hell alone from your "revolution".
#5.3 triad_man on 13 May 2005 - 15:50
QUOTE
Lame rich ppl... lame economic system...


That's right, they are lame because they are successful and well paid. An economic system that rewards inovation and hard work. What an awful system.

I don't know what you would want replace it with but leave me out. There is only one place to go when you are broke, to work.
#5.4 Treefrog on 13 May 2005 - 17:23
Actually our (the USA) economic system rewards those that can find and exploit the loopholes in the system the best, rather than true innovation. I would certainly like to be able to fix that, but have absolutley no idea where one would start.
#5.5 darksoul on 13 May 2005 - 18:31
How did Micheal Dell exploit loophools in the system? Maybe he did but it seems to me the he was the first to efectively use the internet to build his business and had the forthought to cut out many of the middle men and build computers to order. But maybe you know something i don't
#5.6 Treefrog on 13 May 2005 - 19:26
Sorry, I wasn't making a jab on Dell specifically, but the state of our economic system in general.
(2 replies) #6 mannan on 13 May 2005 - 14:52
Redhat should have to improve his Desktop Reputation
#6.1 kad.au on 13 May 2005 - 15:13
If your saying the Redhat desktop sucks, i could not agree more. If you wanna see where desktop linux is up to, take a look at Suse. Rehdat is miles behind..
#6.2 Treefrog on 13 May 2005 - 17:25
Suse is nice, but they were originally based on RH, and use the rpm system. I stay as far from that as possible. The nicest desktop in my eyes, is Dropline Gnome for Slackware. That is droolworthy.
#7 TwoTailedFox on 13 May 2005 - 15:48
One would surmise they wouldn't get Red Hat Linux, rather Fedora Core Linux.
#8 nic on 13 May 2005 - 16:44
How unexpected of Dell.

QUOTE
Consider that shares of Red Hat are almost down to their 52 week low, and it makes me think that we'll soon be seeing Microsoft Linux on the retail shelves.


Very doubtful. Why would they want to compete with their Windows Server line? Unless they abandon Windows Server, my bet is that we will not see a Microsoft Linux.

kad.au: what are you talking about? Suse and Fedora Core are pretty much at par with each other Desktop wise. Suse uses KDE and Fedora Core leans towards Gnome. KDE has more features, but Gnome is more stable and performs better. You can switch the windows manager in FC to KDE and have the exact same interface.
(3 replies) #9 mannan on 13 May 2005 - 17:33
Redhat have to make a Desktop OS to compete with Windows Longhorn
#9.1 Treefrog on 13 May 2005 - 17:57
Wll, since RedHat already has a desktop OS, and Longhorn is still vaporware, I'd say that RedHat is better. It's kinda hard for something that does not yet exist to compete with anything.
#9.2 EduardValencia on 14 May 2005 - 16:43
treefrog,longhorn is a reality,not materialized,and surely it will beat redhats ass until it bleed,and chunk of it ,fells
#9.3 Treefrog on 14 May 2005 - 19:46
Try to post when you're not high or whatever dude. Then maybe your post would be comprehensible.
#10 Julius Caro on 13 May 2005 - 17:47
Well, at least this shows that linux is not just some amateur thingy (like microsoft wanted everyone to believe ).

#11 darksoul on 13 May 2005 - 18:36
I don't think MS will release MS Linux any time soon, i wish they would. I really with the justice department would have done the most logical thing during the anti-trust case and broken MS up atleast split it into two companies OS and Productivity software. Then we would have a lot of good software for the linux platform that we don't currently have.
#12 Help on 13 May 2005 - 20:42
Nice work shane!! w00t
#13 scoobydoobie on 13 May 2005 - 22:23
QUOTE
Microsoft Linux would be not adopted by any developers and would fail miserably?


You actually think Ms couldn't get developers? They'll be pounding down the door

Microsoft should develope a Windows/Linux distro. I bet you top dollar that they'll make it act exactly like Windows. Now how many people would that bring in? Millions. I'de buy it in a heartbeat.


QUOTE
If they sell a decent desktop distro they would have to price it very low. ($30?) to compete with the likes of Linspire and SuSe while at the same time making is superior to the free ones like Debian, Ubuntu, and Fedora.


Why would they have to worry about all the different distros out there? That's exactly what the Linux world needs. A unified distro. Under 1 name. Windows/Linux for the desktop..Windows/Linux for the server base..etc..They probably COULD call it Lindows...
No one in the Linux community is unified. Sure, say what you will.."it's about choice and freedom to do what you want, blah, blah, blah" "I want my OS my way"
Hey, that's great...but you want the world to accept Linux? How? The average person has no idea what they should get. You got what, a gazillion different distro's out there.? Please spare me. Face it, you got too much competition between yourselves to ever be accepted by the "real" community. Average Ma and Pa.


QUOTE
How many Linux consumers would be prepared to install a microsoft Linux distro?

The question is how many Windows consumers would be prepared to install a Microsoft/Linux distro? My bet...lot's

How many computers do you think will come preinstalled with Windows/Linux? You people have no idea how crushing this could be to the Linux Community.

Last edited by 49208 on 13 May 2005 - 22:37
(1 reply) #14 nikolokolus on 13 May 2005 - 23:31
MS/Linux crushing to the Linux community? This whole thread contains some of the most mis-informed tripe I've ever read regarding linux vs. Micro$oft.

As an avid Linux user, I can tell you that some of the reasons people use linux are to a large extent driven by mis-trust of Microsoft, and based on Microsoft's past history of creating insecure computing platforms (I tend to agree most with this sentiment). Am I saying that windows is Satan, and all of that crap so many people tend to spew out? Absolutely not! But from a standpoint of choice I can say with some small measure of authority that most of the Linux distros out there serve distinct purposes and market segments and the people who use them (while small in number) are very loyal to those companies/distros Linux fans are arguably as fanatic as Mac fans.

The whole point of the linux Kernel design is to create specific use Operating environments dependant on need and independant of onnerous licensing agreements. Web/mail servers don't necessarily need a graphical Interface, Desktop environments don't necessarily need a lot of server tools. This idea that one size fits all is pure rubbish.

Microsoft is very good at what it does; namely buying up other company's innovations or releasing products designed to undercut another company's market share, or maintaining hegemony, with a massive team of lawyers and a multi-billion dollar war-chest (MS-DOS vs. OS2, Windows vs. Mac's GUI, etc.)

If Micheal Dell is investing money into Redhat then it's very possible that this is not with Bill Gate's blessing, and he is looking for some alternative to fill his customer's needs in the server segment.

#14.1 EduardValencia on 14 May 2005 - 16:50
when microsoft achieves stability and security,the linux community will cry,and then you will hate MS even more! ,this 2 waeknesses in the Windows platforms have driven users 2 switch,i wonder how long this will revert,we are near,very near of a revolution

linux is a good stable OS,but the problem is the community,very scattered,they can easily be beaten,at some point they won't catch up with technological advance in the software industry.

#15 scoobydoobie on 13 May 2005 - 23:59




QUOTE
But from a standpoint of choice I can say with some small measure of authority that most of the Linux distros out there serve distinct purposes and market segments and the people who use them (while small in number) are very loyal to those companies/distros Linux fans are arguably as fanatic as Mac fans.


"While small in number" That's the key. Microsoft can get ANY product it desires out to market and hit a much higher level of distibution. So, I guess, if Ms did attempt to create, market and sell a hybrid distro then would assume that Linux will forever more stay as it is now. An alternative for the "rest" of the world.

QUOTE
Microsoft is very good at what it does; namely buying up other company's innovations or releasing products designed to undercut another company's market share, or maintaining hegemony, with a massive team of lawyers and a multi-billion dollar war-chest


What company doesn't buy up other companies and adds them to thier mix? Good God boy, look at the world of business around you.
(1 reply) #16 Peter McGrath on 14 May 2005 - 01:15
Microsoft will never sell linux. The Linux fanatics only WISH Microsoft would support it so that they will get applications that make their O/S useful and also someone writing device drivers to make all the nice new gadgets work with their O/S. (and actually work without you having to jump through hoops and cast magic incarnations that only the wizards in the temples know.)

Who put the comment
QUOTE
seeing Microsoft Linux on the retail shelves
on Neowin - it wasn't in the original article. No doubt the same fanatic who submitted the article.
#16.1 Treefrog on 14 May 2005 - 03:13
Most Linux users have NO wish for microsoft to support them in any way, shape or form. It would be nice for 3rd party software support for things like games and large business apps (think CAD, tax preparation, accounting, etc), but there is a whole world of usefulness there already. It's also the hardware vendors writing the drivers, or giving enough access to specs to allow one to be written otherwise. If only the hardware vendors would take a cue from Nvidia and make a driver installer such as they do it would be so nice.
#17 nikolokolus on 14 May 2005 - 05:05
QUOTE
What company doesn't buy up other companies and adds them to thier mix? Good God boy, look at the world of business around you.


Umm . . . my point was that Microsoft is very good at making a lot of money for itself and its shareholders (good for them), but MS has never been an innovator, just very good at borrowing ideas and often writing bloated, insecure code. That doesn't make them bad, good, evil, whatever . . . hell I'm sitting at my laptop that runs windows XP pro right now. But when I'm ready to print something later on it will go through my Debian File/Print server. Why? because I like not having to pay $300 dollars for an OS that doesn't need a 2ghz proc. and 512 MB of ram just to do simple tasks.

The tone of my previous post wasn't meant to be some sort of tired Linux vs. MS troll, I was just trying to add some observations to the mix.

[/shrug]
#18 Computer Guru on 14 May 2005 - 11:31
Microsoft will never enter the Linux Flavor competition when they have a much better os out there.
#19 Shannon on 14 May 2005 - 12:51
I wish people would realise that the majority of end users don't use an OS for the sake of using an OS. They use an OS to run their applications. The majority of software and drivers are written for the Windows platform, so obviously users are more inclined to use Windows. They (Microsoft) have no real need to buy into Linux, unless they want to appeal to server adminstrators and hardcore geeks that like to write their own kernels.
#20 roadwarrior on 14 May 2005 - 16:32
QUOTE
Does this latest news further anyone else's suspicions that Microsoft is shopping for a top name corporate driven linux distro to buy in order to compete with Novell's purchase of Suse?


Not at all. How does Michael Dell's investment firm investing in Red Hat have any real relation to Microsoft wanting to buy a Linux distro? It doesn't. It would take some weird kind of logic to connect the two. This article is troll bait, plain and simple. Just read some of the idiotic comments posted here already.

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