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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.
...but one wonders what's behind of this move.
Couldn't it be that Michael Dell was just donating $100 million out of the goodness in his heart? I mean isn't it POSSIBLE that someone nowadays is just doing something that DOESN'T have an ulterior motive or ISN'T planning on recouping in the future?...... Oh shit, I just read what I actually wrote....nevermind.
Dell - neither the person nor the company
Aha
"Competence" = competition
In Spanish, competencia means both, hence this is an easy error for native Spanish speakers to make in English.
What if I do the same thing, and I do get different results?
Sigh. Editors.
but one wonders what's behind of this move.
With a 100 million investment by an individual (and not a corporation) you can bet that Michael Dell thinks this is a good investment. That kind of money isn't chump change, so he must think it's a good risk.
AccountKiller
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 I had Dell's capital I might invest a few bucks in an up-and-coming tech stock like RH. It might prove very useful given that Dell have some interest in the cheepo server market.
I'm not saying this points to some massive change in direction, just a little future proofing, and if it all goes wrong he can afford it.
init 11 - for when you need that edge.
Even then, Dell might make money on the deal: .
Envy my 5 digit Slashdot User ID!
Actually at the time MSD procured the shares it made a lot of sense. ES3 was set to turn a massive userbase into a load of paying users. It was everyone's ecpectation that a significant portion of professional non-paying RedHat Linux 9 users would convert their systems to the paying model. At the time the expectation was that RedHat would thus generate a healthy amount of liquidity and that is always good for share prices. The market didn't quite play out that way but that is of course with hindsight. MSD's decision was a rational investment. Getting Michael Dell a say in the shareholders meeting is of course the priviledge of wealth and there can be no doubt that Dell's views on the market are not without audience in Raleigh. For MSD to diversify his investements is just sound financial management, I mean would you hedge your entire financial future on Dell Computer?? ;)
speculation of Michael dell actually buying RedHat is, on this information, totally unfounded.
-if at first you don't succeed, stay the heck away from paragliding.
I underestimated you guys! I'd have thought that this move, which seems to be his investment group making an arbitrage play, would be overspun as a ringing endorsement of Red Hat by Dell, and Michael Dell. Instead we get "It's a plot!!! A plot to destroy Lunix!!!!"
I also like the way the submitter managed to completely invert the statement about how analysts _do_ _not_ believe this is takeover attempt.
What I'm listening to now on Pandora...
Dell pre-installs Red Hat on all server machines to be sold.
Friday's headline:
Michael Dell sells shares in Red Hat for big profit.
denentures are debt. Michael did not invest in Red Hat in the sense that he bought into the companies long term success. He loaned them money. If they can't pay it back, Michael's $(99.5*10^6) may not be sunk. It might be a secured loan. I'll admit, I did not RTFA carefully enough to know if it is secured or not. Of course if the rate of return is high enough it's unlikely that RHAT won't be around long enough for principal recovery to be gravy on the steak.
:-)
My $12K in Novell stock is different. It represents faith in the company as opposed to faith in the company being able to pay me back.
Then again, Michael may be playing off Redhat against Microsoft to get bettr pricing, just like he does with AMD&Intel which could well result in the loan paying off many times over for his company, which he owns a lot of, in short order.
Nowthat Senor dillitante investor has spoken, let's here from some folks who know what they're talking about
Dropping $100M sounds like it might crush RedHat. All those dollar bills piled up on top of the roof...
Imagine if they were Sacagaweas. Those poor Linux geeks wouldn't stand a chance with dollar coins raining down on their heads.
It was Dell - the asparagus!
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?
Javascript + Nintendo DSi = DSiCade
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.
Michael Dell is just making sure that he has multiple sources for his supplies.
Would Michael Dell suggesting to Dell the company that they should start using RH more, be a conflict of interests for the other investors? He has a vested interest in both companies. What if he bought a decent size of AMD stock and then within the next few months Dell the company decides to start using AMD chips? Maybe there is no oversight for transactions like that but it sure as hell seems that there should be.
Bad boys rape our young girls but Violet gives willingly.
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.
Dude, you're getting Red Hat!
Circumcision is child abuse.
The classification of his investment is a matter of semantics, plain and simple. Since Dell, the individual and not the company is making the investment, the company's board of directors and other executives can down play the move. This helps to keep Microsoft at bay, as indicated above.
While I've never worked for Dell, contractor or otherwise, it's no secret that there are quite a few employees that like Red Hat and have been pushing it to the execs for quite some time. This is what lead the company to include it in their server products in the first place.
The timing of the investment is interesting because Red Hat has beaten street estimates due to a rise in subscriptions (found in this CNET article.) This must have the Red Hat development team jumping for joy. Dell's involvement will only drive them to introduce innovative technologies to both RHEL and Red Hat Desktop.
What I believe will happen in the not too distant future is that Dell (the company) will:
* Ante up and start promoting Red Hat based servers more than they have done in the past. While it may piss off MS, they'll respond, albeit gently, it's just business and keep going.
* Create a sales bundle for small to medium businesses that will include an RHEL server and x amount of desktops loaded with Red Hat Desktop. All this with a migration team waiting in the wings to help the company through the initial learning curve.
* Similar sales bundle for larger corporations, including clustering services and SAN related products.
and finally...
* Further collaborate with Red Hat to offer special pricing on multi-tiered support packages for Dell customers switching from Windows based systems. Since Dell already offers Linux training services and the like, it would basically be a strengthening of its partnership.
Only time will tell! We'll revisit the issue in a few months as I'm sure it will garner more attention when Dell (the company) makes a move.