Dell Prepares Ubuntu Encore
Let's start with two recent hiccups:
At first glance, Dell’s Ubuntu Linux strategy has hit a couple of bumps in recent weeks. But The VAR Guy has done some digging and learned that Dell and Canonical are working on a few surprises that could bolster Ubuntu’s presence in PC markets around the globe. Here’s the scoop.
Let’s start with two recent hiccups:
- Dell’s U.S. website (Dell.com/Ubuntu) in mid-2009 stopped selling Ubuntu on desktop PCs, though a netbook and notebook option with Ubuntu remain available. A Dell spokeswoman in late July told The VAR Guy that Dell would introduce a new desktop PC in early August. Fast forward to the present (Aug. 28) and Dell still hasn’t made good on that statement.
- Free Software Magazine on Aug. 24 posted an Open Letter to Michael Dell, alleging technical issues with a Dell Inspiron Mini 10 running Ubuntu. Dell’s own social media employees have posted replies offering immediate help, but the open letter has since gone viral on the web.
Basically, Dell has a PR problem on its hands: Customers and readers are wondering (A) if Dell is committed to offering new Ubuntu desktops and (B) if the Free Software Magazine article involves a single, isolated issue or indicates broader problems with Dell’s engineering.
Good News Coming
The VAR Guy isn’t a Dell Ubuntu netbook user, but generally speaking he hears good things about the mobile devices. The upshot: Free Software Magazine’s open letter to Dell may have involved an isolated incident rather than a broad engineering issue with Dell’s systems. Admittedly, that’s speculation on The VAR Guy’s part.
Now, the bigger question: Is Dell committed to Ubuntu? Multiple sources say absolutely yes.
Dell PR has been somewhat quiet in recent weeks. However, a source close to the Dell-Ubuntu efforts states the following:
“There will be more [Dell Ubuntu] desktop and notebook SKUs and the relationship will be more global then ever next year… there will be plenty of Ubuntu/Canonical and Dell good news stories in the near future.”
The VAR Guy trusts his source and suspects a range of Dell announcements are on the way. In a potential sign of things to come, Dell now offers Ubuntu as a preinstalled option on Latitude laptops in the Netherlands. And recent Dell statements indicate that nearly one-third of the company’s netbooks ship with Linux preinstalled.
Has Dell made some errors in the way it markets Ubuntu systems? Yes. Is the company committed to introducing more systems (including desktop PCs) with Ubuntu? Here again, the answer is yes.
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I so very much love it when bloggers quote unnamed sources. Can you at least tell us which company they work for?
But more to the point…Next year?!?
Can you get your unnamed source to commit to a statement concerning availability before the end of the calendar year in time for the Christmas shopping season? Its already bad enough that Dell punted on Ubuntu desktop systems before the back-to-school rush…but that quote evidence that they plan to punt on the end of the year gifting season as well?
-jef
Next year… I’ve been hearing this too much lately…
I’m wondering what keeps them up. Its not the development.
Lots of their products are Ubuntu ready… So why not just install it before shipping?
Here’s some speculation from The VAR Guy: He does believe Dell will expand its Ubuntu offerings in the US this year (2009) based on multiple conversations with folks close to Dell. But the broader, global efforts will accelerate in 2010.
Could Dell have handled things better in the short term? Absolutely. Is the company working to expand its Ubuntu offerings? Yes. Sorry The VAR Guy can’t offer more specific details in the meantime.
Sigh….rumor AND speculation…tsk tsk.
I guess I’ll have to go poke Mr. Vaughan-Nichols and see if he can actually put someone from either company on record since he was the first to get a Dell spokesperson on record in July when the Ubuntu desktops went missing.
-jef
Jef: Tell SJVN The VAR Guy’s team said hi. Our team worked with him back when Ziff Davis was the dominant media empire.
So the foundation of this entire speculative non-story is based on “a source close to the Dell-Ubuntu efforts”. Can you be more vague? This isn’t news until it has been verified with named, official sources.
HoTMetaL: You can either trust The VAR Guy or dismiss him as someone who spreads unsubstantiated rumors. In this case, The VAR Guy’s source is solid. Rock solid.
The VAR Guy:
A rock solid source…that won’t go on record. Yippie.
The real issue here is that your unnamed source feels this is information that is appropriate to leak..but not appropriate to pin their name to. This isn’t exactly a federal whistle blower case so why the need to leak you information off the record. Don’t enable a corporate culture devoid of accountability. Make the case as to why the person should get to stay anonymous and the potential harm that would befall them if they went on record.
-jef
Over the passed few weeks/months I have been reading all this hype about Dell and ubuntu, tut tut. To me it looks like a effort to scuttle Linux on Dells behalf, with all these false promises, it could be that a particular company has got Dell by the short and curlies when it comes to Dell Ubuntu sales in the states. I will believe it when I see them for sale in Best Buys and the likes like they say, seeing is believing it has happened,
Nice work VAR Guy. Now what I want to know is when are we going to get an Ubuntu driven tablet from Dell?
So far as technical issues go. I run an XPS 720 and an M1330n with no issues. In fact I suspect most Dell systems could run Ubuntu just fine.
@carling: In all fairness to Dell, the US has enjoyed better support from Dell for Ubuntu than Europe has. Until recently there were a maximum of 3 Dell models available in the UK. In comparison there were at least 6 in the US. They even had the new Studio line running Ubuntu.
The VAR Guy:
Here’s a counterpoint…. Dell just had their earnings conference…the transcript of which is available.
Check seekingalpha dot com:
article/158737-dell-inc-f2q-2010-qtr-end-07-31-09-earnings-call-transcript
I’d paste the transscript as a link..but workswithu automatically flags links for moderation it seems.
At no point is Ubuntu mentioned. At no point is linux mentioned. But Mr. Dell seems to be banging on the the Windows 7 upgrade war drums.
And even better…the Dell reps on the call say that netbooks sales represent a total of about 5% of their total unit sales. So Ubuntu netbooks ~30% of ~5% resulting in ~2% total Dell sales. They go on to say that they could be selling more netbooks wouldn’t be good for their bottomline.
Brian T. Gladden:
“Yes, again we’re focused on profit share not unit share. If we wanted unit share we’d go sell a whole bunch of netbooks but we wouldn’t have the operating income we have.”
I think that puts your insider information in perspective. Ubuntu pre-installs are a very minor revenue stream for Dell and netbooks sales are the best bang for the buck in terms of profit margins…even though 30% of them are going out the door without the Windows tax. Hmmm..what’s that imply about the marginal per unit profit of Ubuntu pre-installs and for the future of Ubuntu pre-installs in a company that is self-described as profit share focused?
So again I ask…did you get your insider information from a Dell rep or from a Canonical rep.
-jef
Jef: Um, why would Dell mention Ubuntu at all on a financial call? Dell generated $12.76 billion in quarterly revenues. Windows 7 is a massive revenue opportunity for Dell.
For Dell, Ubuntu is a nice-to-have side bet that offers customer choice.
Of course Dell is going to mention the Windows 7 opportunity on the call. It’s a big, big revenue opportunity. Michael and team would have looked foolish to mention Ubuntu… a niche offering that is available on 2 US Dell systems.
Also of note: Dell may not have mentioned Linux, but they are essentially Red Hat’s biggest reseller. Dell is working hard to test/experiment with multiple Linux flavors on servers and desktops but Windows systems still represent the vast majority of Dell’s revenue.
In your closing sentence you ask for The VAR Guy to reveal his sorry. Sorry, he won’t.
The VAR Guy will eat crow and admit he was wrong if the blog post above was wrong. But our resident blogger has spoken to the right source and he’s plugged into what’s coming next from Dell/Ubuntu.
The VAR Guy stands by his report. But he really does appreciate the healthy debate, Jef.
carling@9: The VAR Guy doesn’t blame you for being skeptical, since Dell has cut back on US Ubuntu systems in recent weeks. But stay tuned. The VAR Guy’s coverage above is accurate.
Aikiwolfie@10 and 11: The VAR Guy hasn’t heard any reports from Dell about an Ubuntu tablet. But a multi-touch device would be really nice, wouldn’t it.
Yes it would. For me though it needs to run Ubuntu or at least some form of Linux. Like say … Android. I’m just not interested in anything else right now.
The VAR Guy:
1) Red hat isn’t prepping a new RHEL release..so there’s nothing new there in the server space for Mr. Dell to point to that would help move new server hardware. So that’s a red herring argument at best. Mr. Dell refers to a July analyst meeting that speaks to “open solutions” for the data center. Do I need to provide a direct link to that webcast or can you find it on Dell’s website on your own?
Mr. Dell made a prepared statement about desktops…and he specifically pointed to the upgrade from XP to 7. Ubuntu is a pure desktop play for Dell..no servers…isn’t the Ubuntu deployment strategy about replacing XP installs as well..but Ubuntu didn’t get a name drop? Hmm.
2) Are you implying that Ubuntu isn’t a substantial profit opportunity for Dell and thus was not deserving of a mention in a prepared statement?
Ubuntu 9.04 is being released at about the same time as Windows 7. If you are right and Windows 7 is such a big opportunity that Dell can’t risk screwing it up by mentioning Ubuntu in the same breath as Windows 7..what does that say about Dell’s ability to adequately advertise a set of Ubuntu offerings in the next 3 months while the push to get Windows 7 pre-installs out the door?
Sounds to me like information is being leaked to Ubuntu-friendly press off-the-record to build buzz because Dell won’t be able to spend money advertising it themselves while they focus their advertising expenditure entirely on the Windows 7 launch. And that’s totally okay. If you don’t mind being an unpaid shill instead of a journalist that’s perfectly okay. Still doesn’t explain why the source feels they need to stay anonymous.
-jef
What surprises me is that Dell Linux division has not offered any machines in an entire product category – desktops – for months and it looks like this will continue from what you say. Can you imagine them dropping all Windows desktops for several months while they decide what to do next? This is a strange business decision, along with their failure to promote the Linux systems or even make them easy to find – they are buried on the website. In the monthly catalogs they send out I have never seen any mention of any Linux OS offerings.
I should mention that I have bought both a Linux desktop and laptop from Dell, and have been quite satisfied with both.
J. J.:
It makes perfect sense if the marginal profit for Dell per unit sold is less for an Ubuntu unit than it is for a Windows unit. In retail you push three types of products heavily. Products with a high mark-up; products which act as loss leaders to get you in the store with the hope of buying additional items; and product inventory which you need to offload to minimize a loss or make room for product with a higher marginal profit.
You look closely at the Dell financials and you can make the argument that the for Dell, the Ubuntu pre-install units are not as profitable per unit than an equivalent Windows sale.
If you care about profit and not unit sales…you push the products that give you the best profit margin. If Ubuntu pre-installs aren’t the best profit margin…then no..Dell isn’t going burn cash for print ads to advertise them instead of a more profitable windows unit.
How could that be that Ubuntu units are less profitable if Ubuntu is free of charge to users? Several potential reasons. One is that it costs more for Dell to do the necessary QA or to contract with Canonical for the necessary QA. We don’t know the terms of the arrangements. It could also be that customers purchasing Ubuntu systems are less likely to buy add-on services like extended warranty. Then there is also advertising dollar kickbacks from software vendors. We don’t really know what the terms are between a software vendor and an OEM. For all we know both MS and Canonical could be paying Dell for shelf space in one form or another.
-jef
Dell’s bumps are costing them sales, though. I, for example, now own an Ubuntu-powered System76 Starling netbook, which I use daily and love (see review at http://tr.im/wYOg). I’ve owned and enjoyed Dell products before, and went to them first for a netbook, but they didn’t offer one with 9.04. Best wishes to them, though – hope they get their act together soon.
“…isn’t the Ubuntu deployment strategy about replacing XP installs as well…”
No. The Ubuntu strategy was about PR for IdeaStorm, leverage niche markets and applying some pressure to Microsoft. It was never about replacing any Windows based systems or cannibalising any of Dells Windows market share.
I think the way Ubuntu was initially introduced by Dell keeping it confined to the basement is proof enough of that.
John Hulls comments on IdeaStorm recently might make the VAR Guys source looks a bit stupid and out of the loop.
http://www.ideastorm.com/ideaView?id=087700000000AFRAA2amp;mc=0amp;p=2
I could be reading it wrong. But it looks to me as though John is saying Dell aren’t making money from Ubuntu. That’s why the number of systems have been cut back and why we’re not seeing any new offers from Dell.
Now when you don’t make much if any effort to advertise a new product. How can you complain about not selling it?
As an interesting side note. Windows 7 is just around the corner and Dell are very much pro-Windows 7 for obvious profitable reasons.
Aikiwolfie:
The VAR Guy personally met John Hull a few months ago. And Hull has always made the same, logical statement: Dell doesn’t plan to offer Ubuntu on all systems because there’s no financial driver to do so.
Why incur the testing/compatibility costs on “all” systems when instead you can limit the costs and focus consumers on a few selected Ubuntu systems?
The VAR Guy stands by his report and his source: Dell will be introducing Ubuntu on more systems — though certainly not all systems. Stay tuned.
If The VAR Guy discovers his original source/report was wrong, our resident blogger will post a follow-up eating crow.
Side note: Aikiwolfie, thanks for taking the time to raise healthy questions.
Well like I said. I could be reading it wrong. But John Hulls comments do look bad for Ubuntu on Dell systems. Especially in light of Dell backing Windows 7 so heavily and so many Ubuntu compatible systems being pulled while still being offered with Windows Vista/7.
It all feels very very wrong.
Anyone knows why virtually all refurbished mini’s n Dell outlet come with win XP? I am shopping for a refurb with no MS Tax and disappointed!
Let me elaborate a bit more: because a good fraction of the Dell netbooks being sold new are running Ubuntu, and almost all refurbished ones are running XP, it seems as if Dell is buying an OEM license for each refurb and passing it on to the consumer. Is that the case? Why not give the option to run Ubuntu (or just no OS)?
I won’t be surprised if Dell making a profit on Ubuntu systems depends on selling enough units with Ubuntu. Finding the right balance between “enough models with Ubuntu so that people find what they need” and “no more models with Ubuntu than we can support QA for” might not be that easy to find currently, and I suspect Dell is experimenting with it.
Also, if I look at the only systems with Ubuntu they offer in Belgium amp; The Netherlands now (Latitude 2100), they ask an additional 30 euro for WinXP. If I wanted to buy a Dell netbook (I already have another netbook, so don’t need one now…), I’d certainly be happy to pay the same price as for WinXP if that can help Dell (or any other computer manufacturer/store) to get profitable. Maybe The VAR Guy can do a poll to see what other users think about that?
JanC: I would be happy, too. The only important thing is clarity: people need to know that this money is NOT going to a MS OEM license. Silly as it sounds, that’s what many “Linux” vendors used to do a few years back, particularly with laptops.
At the end of the day Dell are currently doing themselves more harm than good by messing it’s Ubuntu customers around.
“if the Free Software Magazine article involves a single, isolated issue or indicates broader problems with Dell’s engineering”
Broader problem. Everyone knows the Paulsbo chipset (which the Mini 10 uses), is a nightmare for Linux support. It will never be a good Linux machine. Remember winmodems? The Mini 10 is a winbook.
For a Quarter, (July, August, September) Dell has not sold Ubuntu desktop computers to home users here in the U.S.
Can we cut the bullsh*t. Rumor and wishful thinking aren’t computers and revenue. Dell and HP are effectively Microsoft subsidiaries.
Is Dell really going to start selling their 537 with Ubuntu any time soon?
They missed the whole back-to-school market, just like Microsoft ordered.
If only a major player would sell an Ubuntu Desktop Duo-Core, 2GB+ RAM, DVD-RW, with 19″flatpanel for under $500, there would be no need for Dell or HP when shopping Open Source.
Imagine Apple leaving the OS off a making an Open Source Box….
So much for radical dreams…
If MS-Dell was going to sell something, they would need the rumor mill as much as putting a web page with working link online…duh.