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Dell Founder Dropped $100M Onto Red Hat
diegocgteleline.es writes "Via google news, I found a article at MSNBC claiming that Michael Dell, Dell's founder and chairman, has droped $100M into Red Hat (Michael himself, not his company). Analyists say that "Dell - neither the person nor the company - is interested in acquiring Red Hat", but one wonders what's behind of this move. A fight against their competence in the server market?"
Once upon a time, Dell had their own SVR4 UNIX Distro. Perhaps Mr Dell has a passion for OS's.
Michael Dell is just making sure that he has multiple sources for his supplies. Operating systems is just one component in his systems. Only a veriy foolish CEO would tie himself to single source.
He's also tweaking MSFT. MSFT could come back with lower prices (of course, they could come back with higher prices). Dell has enough muscle to pay the higher Microsoft price if asked to.
if your RTA it sounds like his investment company reviewed the market, found a solid invtestment choice based upon the principals that he specified, and, likely with his approval, invested less than 1% of the money he had with them (not even all of his wealth) in that company.
They're not going to discuss his reasoning but it likely says alot of red hat's market capitalization, nothing more.
"Jedi Business, go back to your drinks"
Self-fulfilling prophecy?
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That's because they have an exclusive contract with Intel. If they were to offer AMD CPUs, they'd lose out on the competitive advantage that contract gives them. If you want an AMD64 system, go check out Sun. Their systems are a smidge more expensive, but still quite affordable for an individual. (Especially if you do some of the more expensive upgrades yourself.)
I have to wonder though, how does Dell feel about ceding the AMD64 market to Sun? Must be rather annoying for them.
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The irony, which few people appreciate today, but which will become painfully obvious within the next decade, is that there is more money in free software than in the commercial variety.
Dell is putting some cash on the obvious Linux market leader. Personally, I'd put my $100m on Novell.
Oh, and where "is" the money in free software? That's the lovely part. It's not in the software at all, but in the explosion of valuable products and services that it enables. We're only at the start of this process, it's barely visible.
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I have heard from two different sources, one of them a friend who has worked as strategic management consultant for Dell for about eight years, that Dell is planning on offering the choice of a pre-installed Linux distro(Red Hat?) on all notebooks and desktops by late summer. Perhaps this would at least in part explain the investment mentioned.
Yeah, that was right around the time when Sun was getting in big trouble for cutting corners. They pretty much lost EBay because of it. Sun lost a lot of consumer trust during that period.
These days I wouldn't buy from them, just because their financial situation is so bleak that there's no reason to believe that they'll still be in business in 1-2 years.
1. They have 7 billion in the bank, and they're more or less breaking even. That's not *that* bleak.
2. You have the hardware. It's a standard box with PC hardware. Who cares about whether Sun will be there or not?
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When you've got multiple billions of dollars in liquid assets, investing one tenth of one of those billions in a company that you like is a no-brainer. Risk, shmisk.
Michael Dell has been a capitalist his whole life, from selling newspaper subscriptions to selling PCs out of his dorm room. He's always been a risk-taker and an achiever. I'm not really impressed with him as a deep thinker, from the few interviews and articles I've seen him do, but that's not his area.
His goal was becoming the top PC maker, even bigger than IBM. His victory in that arena is complete, having driven IBM out of the PC market. Those of us who have watching the computer scene since the '70s should think back to what IBM was then.
Suppose a new kind of car were invented that a guy in his garage could make, and one of those garage hackers figured out how to mass-market his vehicle. If he did it so well that GM decided to get out of the consumer market altogether, that would rival what Dell did.
So what do he do when at 40 having accomplished what seemed like an impossible goal? I'd want my life to mean something besides business, but I'm not him.
I suspect you'll see Dell try to accomplish some new "impossible" goal, whether it's space exploration, a cancer cure, seawater desalination, selling electric cars, or whatever.
I don't know, because I don't dream big enough.
sigs, as if you care.
Maybe he is hoping the stock goes back up to $29 where it was a year ago.... (its at 11 now)
RHAT is a very volatile stock, big price swings. 29 was at the high end of one of those speculative swings. Its sort of idling in the middle right now. It could go to 5 or 30 in the short term, it all depends on the new and what the speculators think, but in the longer term (say a couple of years) it will probably hit the mid to high 20s again.
The Brand. Depending on how cheaply you can get it, the Red Hat brand might be worth it. I've run into a few people for whom Red Hat = Linux.
How it works:
Lets say Dell purchased the notes at par, so that would give him 100,000 debentures ($100 M/$1,000). If he coverted the notes into stock, he would get 3,907,500 shares of Redhat (100,000 multipled by the note's specified conversion ratio of 39.075). Multipled by today's stock price, that would give him $43,099,725 worth of Redhat stock.
"I believe Linux actually is truly desktop ready"
GNOME and KDE are to a point where they are basically on par with Windows, in terms of usability. More ISVs need to recognize this and go back to supporting UNIX (and Linux). It's interesting how what's old can become new again.
I imagine Microsoft is like a water baloon being squeezed from below by Linux and from above by Apple and with Solaris sticking needles into the sides. How long until it pops?
-- Microsoft is the most expensive commodity operating system and office suite vendor in the marketplace.
what we need is for RedHat to use this 100m to develop a standard GUI such as apple's OS X that can mainstream linux into the desktop arena. The window managers now for linux are pathetic compared to apple's desktop management. This could fund a very new and very large step for Redhat and linux in general. does anyone know when microsoft is set to sue over this, claiming the money was actually moneies that was laundred by SCO?
Actually, syntactically that is a pretty ambiguous statement.
If a sentence is properly constructed, you should be able to remove the modifier to get the meaning of this statement. "Neither the person nor the company" is just a modifier of "Dell" to specify which "Dell" they're talking about. Remove it for the sentence's meaning:
"Dell is interested in acquiring Red Hat"
However, they use a negative "Neither/nor" construction in an inclusive modifier, which really confuses things. If they really mean "not" they should start with a negative sentence:
"Dell is NOT interested in acquiring Red Hat"
and then modify it with an inclusive modifier:
"Dell, EITHER the person OR the company, is not interested in acquiring Red Hat."
Or they could be more specific and retain the neither/nor construction:
"Neither Dell corporation nor Michael Dell is interested in acquiring Red Hat."
Grammar slackers often make fun of grammar nitpickers, saying "they know what I mean." Well, not in this case. Taken as written, this sentence means the exact opposite of what was probably intended. Grammar conveys specific meaning, and people who do not know or care to follow the rules of grammar risk misunderstanding.
This story is a great example of the fact that the slashdot editors seem to fall into at least one of those categories.
Yes, it is called SEC, i believe. And the offense is called insider trade information. This is what happened to that cooking lady on TV, whatever the fuck her name is.
She got caught, who knows what Mr. Dell is going to do.
cat
Dell is already using linux - every Server you order from them without a preinstalled OS comes with a weird linux installation on it that is Dell's OS installation tool. If you want to install Windows, well this tool does it for you. If you ask me, Dell is just offering what they can sell, and there are just not enough people who really want a Server of Desktop with linux preinstalled, there are just too many distributions, and people won't just take any, they want one specific. Similar argumets probably hold true for the choice of CPU manufacturer: if the price/performance ratio is good enough, and most importantly, the box works, few people care who made the CPU.