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Dell Charges You 70 Dollars To Have No OS
by djlosch
Dell recently responded to the call of the Linux community by offering pre-installed Linux desktops. However, I'll show this was a joke by examining two different offerings:
  1. Buying FreeDOS uninstalled costs $70 more than getting Windows pre-installed.
  2. Buying Redhat pre-installed costs $100+ more than getting Windows pre-installed.

..:: FreeDOS and Some Stats

Dell has their main series of Dimension E520 desktops and then also the nSeries which offer the same hardware, but FreeDOS is included, rather than a Microsoft OS. At the time of this writing, the Dimension E520, Versatile Multimedia configuration is listed at $649. Comparatively, the nSeries near equivalent (E520N) is nearly the same.

Dimension E520, Versatile MultimedianSeries near equivalent (E520N)
PentiumŪ D Processor 915 with Dual Core Technology (2.8GHz, 800FSB)PentiumŪ D Processor 915 with Dual Core Technology (2.8GHz, 800FSB)
Genuine Windows Vista Home Premiumno OS installed, FreeDOS packaged
IntelŪ Graphics Media Accelerator X3000256MB nVidia Geforce 7300LE
1GB Dual Channel DDR2 SDRAM at 667MHz- 2DIMMs1GB Dual Channel DDR2 SDRAM at 667MHz- 2DIMMs
160GB Serial ATA Hard Drive (7200RPM) w/DataBurst Cache160GB Serial ATA Hard Drive (7200RPM) w/DataBurst Cache
19 inch E197FP Analog Flat Panel19 inch E197FP Analog Flat Panel
48X CD-RW/ DVD Combo Drive48X CD-RW/ DVD Combo Drive
McAfee Security Center 30-day trial -
Microsoft Works 8. DOES NOT INCLUDE MS WORD -
1Yr Ltd Warranty and At-Home Service1Yr Ltd Warranty and At-Home Service
Price: $649Price: $669

The only significant difference is the bundled graphics card in the nSeries version. It cannot be downgraded to integrated graphics on the nSeries version, but can be upgraded on the Windows version. Once you make the upgrade, the only remaining difference will be the packaged software. To make this upgrade, the cost is merely $50 with Dell, and is in the customization settings on their webpage.

256MB nVidia Geforce 7300LE256MB nVidia Geforce 7300LE
Upgrade: +$50No Upgrade
Price: $699Price: $669

Then get the full Microsoft (OS and Works) refund, which runs about 78 Euro ($103 at time of this writing). For those who don't know, when you have pre-installed MS software, if you do not agree to the EULA, you can contact the manufacturer (Dell in this case), and the manufacturer is obligated to give you a refund for the software price (although some vendors, like Toshiba, void this clause in your sales contract). This is not some short time rebate. This is commonly known as the Microsoft Tax refund. You can get this on any computer that has Windows pre-installed, unless the vendor voids the clause in the EULA, and you can do it any time before the first time you agree to the MS EULA when you set up the computer. So, subtracting $103 puts the price at $596.

MS Refund: -$103No MS Refund Available
Price: $596Price: $669

You might even be able to get further refunds for software such as the pre-installed anti-virus and DVD playing software. So essentially, you pay at least $70 MORE for FreeDOS, a product which you'll most likely not even use. Once again, thats $649 base price + $50 graphics card upgrade (to get the same hardware) - $103 for MS refund = $596, which is $70 less than the FreeDOS version. Why such a price discrepancy?

..:: Linux Pre-installed by Dell

This is also a joke. Tons of linux users made requests on the Dell request system specifically for pre-installed Linux. So Dell turned around pre-installing Red Hat Enterprise. Alternatively, you can get the exact same desktop with WinXP but the price is exactly the same. I can write an entire rant on how much better Debian/Ubuntu's aptitude (and even Suse's yast) is than Redhat's RedHat Network, but that's not the purpose of this article (I've used Ubuntu for 2 years and Redhat Enterprise at work for a year with sub-fork Redhat for multiple years before that). Checking with Redhat's pricing, the reason for the pricing is clear. Redhat charges a substantial penny for their support. In fact, the lowest price for phone support is $299. So Dell turned around and granted the Linux community's request, but did so with complete ineffectiveness, if not incompetence. Comparatively, the most expensive SLED 10 subscription is only $125 and many tout Suse over RedHat. So, you can have Redhat pre-installed and pay the same amount, or you can buy the MS version, get the MS refund, install your own Linux desktop, and still you're still $103 ahead. You may be able to get the Redhat tax refunded, but this is completely untested.

..:: Conclusion

Dell charges buyers $70 MORE to have no operating system installed than if people get the Microsoft Tax refunded. When users requested Linux, we got a half-hearted response. I fully agree with Ryan Paul's opinion over at Ars Technica, and Dell's response completely justified Paul's arguments. Linux users want Dell to offer cheaper computers, not just Linux pre-installs. When the price is escalated to support Redhat, or even more jacked up to dissuade users from installing their own OS, Dell effectively backhanded the Linux community. As Paul states, Dell just doesn't have the incentives to drop the prices accordingly, so we shouldn't expect to reap any benefits to any of these deals.

..:: Update

Apparently I got dugg, and this article actually reached the frontpage sometime over night (digg front page is in my referrer logs multiple times), but then I got buried. A quick search of dell articles fails to bring up my article but when you include buried articles, this article is there.

Post Last Updated: Mar 31, 2007 5:19 pm
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Comments
Eden Crane wrote on Sunday, 1 April '07 - 2:22:04 AM -0400 [reply]
I agree the system seems unsatisfactory. But consider what you are asking Dell to do. You want them to support an OS they had no previous support for; changing their business infrastructure from sales to support. Not only that, but you want them to do it for less money then it would cost to get a Windows system.
The reality is that Microsoft gives Dell substantial rebates. So your copy of Windows on your new Dell does not cost as much as Windows off the shelf. Also, Dell can get more money from the windows installs by installing apps such as 'AOL' and 'Google Desktop'. They lose out on those opportunities with Linux.
I don't think we 'owe' Dell anything for supporting linux, but at least give them some credit. They are extending an olive branch here, and in the process complicating their business. They are a big corporation and don't want to do anything without being able to make money from it, but also they can't switch overnight. At least look at the situation objectively.
How can they do it cheaper? It's up to them to decide. One suggestion might be to team up with a distro who has a more desktop-oriented approach. Dell could speak with leaders of the distros, maybe hire a few full-time programmers and have it turn out as a win-win for everyone.

David wrote on Sunday, 1 April '07 - 2:26:36 AM -0400 [reply]
This was to be expected as Dell gets a fair bit of money from installing 3rd party software on Windows.

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