The End of the "Microsoft Tax"

Today, bowing to customer demand, Dell launched a new series of desktops featuring the free, open-source Ubuntu operating system.

This is a companion discussion topic for the original blog entry at:

No question this is a turning point. By genius licensing agreements (Gates’ mom and dad crafted?), MS has had a cash cow of getting paid for every PC built for years. An empire was spawned and all that goes with it.

The PC quit being very private beginning with Win95, and today’s Vista coupled with the internet yields a desktop that is a rather Orwellian device.

A business/development desktop may very well need to run MS, but for personal use this could be a great alternative.

It’s also interesting that a typical “decent” Windows home PC costs about $680 today and that Windows is about 12% of that price.

I remember in the Windows 98 days when I was at Microsoft the price the company sold Windows to Dell for was $28 and I’d guess the equivalent decent home PC was more like $1000, or only about 3% of the total price.

Granted, there are lots of other variables in that comparison, but the cost of Windows relative to the cost of the actual PC has certainly risen to the point where it’s something the customer is likely to think about.

David, yep, that’s the ratio of software cost to hardware cost that I alluded to in the first few paragraphs of my previous entry:

It’s basically a side effect of hardware becoming increasingly inexpensive. To be fair to MS (and anyone else who sells commercial software) a 2007 $100 software package does a heck of a lot more than the 1998 $100 package… and software prices are cheaper once you factor in inflation.

Still, it’s hard to compete with ‘free’, especially when ‘free’ is getting pretty damn good through sheer evolutionary force.

You have been able to buy a machine from Dell with free-dos for a while now, but having a Linux option is nice.

There is no “free” in this. Dell will bear support costs for the OS but will they get enough markup to make this work out? If they can get a workable support model then they may come out ahead. Sales will need to show some good numbers.

This could end up orienting a lot of people towards Linux. Given that todays consumers are typically interested in price almost as much as they are in function, and that 12% is a very significant portion for essentially the same functionality, this could see a lot of users switching to Linux.

We have all the Linux users constant demands on Dell’s customer relations blog. If the purchasing anywhere near echo’s the demands they have been placing, this could be the start of a new trend.

Dell sold PCs with Linux on them a couple of years ago, but made it a little harder to actually get them (especially for private customers), without much (if any) cost savings.

I’m glad to see they’re going this route, especially since I usually have a Windows license I can use somewhere if I need it. Now if they could work on the quality of their hardware I might actually see a Dell laptop in my future (though still a distant future given that my current laptop is only a few months old).

The 2 specs are not exactly the same:
with a GMA 950 you can hardly play games or run Aero smoothly (or maybe cannot run it at all), so if you want to run Vista you have to buy the other one.
Furthermore, the GMA X3000 costs more then the GMA 950, so maybe “the real” price difference is a bit less than 80$


Integrated Intel GMA X3000
Integrated Intel GMA 950

doesn’t look the same to me…

AI - your implicit assumption is either that Dell bears no support costs for Windows or that the support costs for Ubuntu are higher. Given how little the average user cares about being “computer literate” I don’t necessarily think that’s true: either one will be hard to use.

Go try to spec out an Ubuntu laptop at Dell, and you’ll notice that software support is an add-on, and that the money goes to Canonical, not Dell. Hardware support is still Dell’s responsibility, however.

I have a Vista-based laptop with a GMA 950, and Aero work just fine. My old work laptop had the 900 series graphics and ran the Beryl cube almost flawlessly as well.

I haven’t tried gaming on them (they’re probably terrible), but for OS / desktop graphics they’re both quite capable.

While it is obviously true that hardware has gotten cheaper and software more expensive in this example the cheaper cost of free hardware is not quite as dramatic as noted. For one, as pointed out, the specs are not quite same and as for Dell buying windows for $28 - 1) that doesn’t mean they sold it to the consumer for that price Would they not mark it up some? I’d say at least 100% just to pay for support calls 2) $28 1998 dollars is about $35 today and IF they did mark it up that puts the cost to the consumer at roughly $70. It would be remarkable if in fact MS was only getting $5 more ($10 to the consumer) for their OS because that isn’t even beating inflation.

Anyway I think it is fantastic that Dell is doing this. It is true that you can get FreeDOS from both Dell and the other behemoth HP but few consumers will ever do that and it is a huge step in the right direction from charging people MORE to ship a OS-less machine as they were doing a few months ago.

I wonder who they think will buy this setup. The budget-oriented home user? The guys that flooded their forum asking for this to happen, but already run Linux at home? Any new user that is not tech savvy and has never used Ubuntu before has a great chance of needing the “Starter Support” making the price get closer to the Windows versions again.
Frankly I expected to see some configurations with lighter CPUs/RAM specs to take advantage of the supposedly lower system requirements of Linux. The laptop looks interesting, though.
I also agree that this is an important event, regardless of it sells well or not.

Actually, there are some significant differences in the configs of the two units. The E520 (the Vista unit) includes some things that aren’t included with the E520N (the Ubuntu unit):

  • Mouse (and no option to add one for the E520N)
  • Modem (ditto above)
  • “Better” integrated graphics
  • “Software” (MS Works 8, Yahoo! Music, Corel Photo, etc. Bloatware, I know, and there are free alternatives, but still…)
  • 6 months AOL (I now, but it’s still “free”)

I’ve also noticed that some options (most noticeably some displays and printers) are more expensive – sometimes by quite a bit – for the Ubuntu unit.

The two machines have different video adapters as others have pointed out, with the Vista laptop getting the nicer one.

The following URL has description of the differences.

–Respect; // :frowning:

This reminds of a story about an user who refused the EULA and demanded a refund from Dell:

He got $105 returned for not using XP…

It’s true that the GMA X3000 is more powerful than the GMA 950, but they’re still both integrated graphics, so neither is particularly good:

3DMark06 scores:
GMA 950 – 170
GMA X3000 – 626

So yes the X3000 is 3.6x faster, but 626 is still a fairly low score. It’s equivalent to the GeForce Go 7200.

Well a GeForce Go 7200 level of device is still enough to run Half-Life 2 (maybe not with all the settings up) and quite a few other games. It also will be enough to take some of the strain from the CPU when running Aero.

So for somebody who is only a more ‘casual’ gamer, then it isn’t too bad.

Personally I’d always go for a decent graphics add in card, but it isn’t for everybody.