New Microsoft contract orders PC manufacturers to stop selling hardware without operating system

Slashdot.org ^ | August 10, 2002

[HAL9000]

Dell No Longer Selling Systems w/o Microsoft OS

Posted by CmdrTaco on Saturday August 10, @01:17PM
from the yer-bringing-me-down-man dept.

Some Sys Admin sent in an email that he got from Dell which basically says Microsoft will no longer allow Dell to sell PCs without an operating system. Please note that Microsoft is not a monopoly, and does not use their monopoly power to squish competition in the market place. The message itself is attached below, and is worth a read, especially the last bit.

UPDATES

1. Effective 8/26 - New Microsoft contract rules stipulate that we can no longer offer the "NO OS" option to our customers beyond September 1st. As such all customers currently purchasing a "NO OS" option on either OptiPlex, Precison or Latitude for the express purpose of loading a non-MS OS will have the following options:

1. Purchase a Microsoft OS with each OptiPlex, Precision or Latitude system.

2. For OptiPlex and Precision - purchase one of the new "nSeries" products (offered for GX260, WS340 & WS530 - details in the attached FAQ) that are being created to address a different OS support requirement other than a current standard Microsoft OS.

We must have all "No OS" orders shipped out of the factory by September 1st. The "No OS" legend code and SKUs will be I-coded on 8/19 and D-coded on August 26th to ensure shipment of orders prior to September 1st. FYI - this effects all of our competitors as well.

[rdb3]

The Penguin Ping. Want on or off? Just holla!

Got root?

NOTE: This Penguin Ping is a restoration. Check with me to make sure you're back on it.

[E. Pluribus Unum]

I recommend Alienware or Falcon Northwest.

I recommend purchasing a good motherboard, processor, CPU fan and heat sink, RAM, hard drive, case with power supply, a graphics card, keyboard and mouse from someplace like NewEgg.com. You can put something together yourself that has lots more bang for the buck. The hardest part is knowing which components to purchase. Assembly is a piece of cake as long as you have purchased suitable components. Choose a motheboard first. Everything follows from there. Choose a motherboard with one of the latest chipsets and five or six PCI slots. Onboard network card and sound is okay, but nothing else.

[Utopia]

The software on your computer is also a SERVICE. You dont own it

I don't want the software. I want a naked PC. Hardware only. No software. Dell did have a policy of making "naked PCs". Now, if I buy a naked PC from Dell, I owe M$ a royalty. Explain to me how I owe M$ anything, when I haven't acquired any M$ licenses, and have just walked away with a hardware box -- a commodity. Again, how does M$ have the right to interject itself into a negotiation between me and Dell when M$ was not party to this negotiation?

[BuddhaBoy]

Again, how does M$ have the right to interject itself into a negotiation between me and Dell when M$ was not party to this negotiation?

You have it backwards.

Dell and Microsoft have a contract.

According to that contract, YOU have NO right to interject yourself into IT. They were first to agree. YOU are left to go with the program, or shop elsewhere.

I dont see what is so difficult to understand. Before you buy a loaf of bread, the Bread Maker has entered into dozens of contracts with suppliers that you have NO right to amend. All you can do is go elsewhere, if you dont like where the bread maker got the flour, the eggs, the salt, you name it. You buy the loaf, as described by the VENDOR, or you dont. It is that simple.

[boris]

"I recommend purchasing a good motherboard, processor, CPU fan and heat sink, RAM, hard drive, case with power supply, a graphics card, keyboard and mouse from someplace like NewEgg.com."

Been there, done that. Frankly I just one day decided I'd built my last PC. Old and lazy--or else maybe my time is too valuable to 'waste' building PCs.

--Boris

[B Knotts]

The software on your computer is also a SERVICE. You dont own it. All you have purchased, is the right to use it. You cant modify it, you cant even look at the source code.

This is false. All of the software on my computer is freely modifiable, and I can indeed look at the source code.

[Utopia]

According to that contract, YOU have NO right to interject yourself into IT

No. I buy a PC from Dell its between me and Dell. If I want software on the PC that's between Me, Dell and the software manufacturers. I AM a party to the sale. I am buying a commodity. M$ interference in my business was ruled illegal by the Federal Government. The whole point is that Dell HAD/HAS the right to sell "naked PCs" -- hardware only. M$ is trying to force Dell to make me pay for software that I neither received and /or do not intend to use.

There is a consent decree between M$ and the DOJ that M$ would not interject themselves into a contract when they were not party to it. It appears that M$ is violating this consent degree.

As it has been ruled that I have the right to buy from Dell a naked PC, and Dell has the right to sell me a naked PC, and M$ has already agreed that it would not interject into a negotiation for which it is not a party, how is this behavior of M$ legal?

If Dell no longer wishes to sell naked PCs, that's another matter. But here Dell wants to sell naked PCs, and I want to buy one, yet I must still M$ a fee. How is this legal, particularly in light of the recent court case?

[Utopia]

Dell and Microsoft have a contract.

I need to explain further. Yes, of course that is a true statement, but irrelevant in this context. The contract between Dell and M$ is only applicable to the PCs that Dell manufactures that contain M$ software on them M$ has NO legal hold over Dell manufacturing. M$ does not own Dell. If Dell wants to ship their computers spray painted in orange paint, its not M$s business. The moment they put M$ software on a Dell computer it is M$s business,

Here is a case, where Dell, the manufactuer is able to create a hardware box that is independent of M$ -- its "naked" -- there is NO contact between Dell and M$ to cover this as there is NO M$ software on the naked PC.

In this context, what right does M$ have to interject itself into a sale of a PC when it was not party to the sale?

[BuddhaBoy]

I give up. I suggest you sue them both, and see how far you get. I cant see how you are missing the very basic point here. Good luck.

[Utopia]

I cant see how you are missing the very basic point here

I'll do it even more simply. Let's see if you get this.

M$ and Dell have a contract. For every Dell computer sold that contains M$ software, M$ gets a royalty. M$ is happy, Dell is happy, and those customers that want M$ products are happy.

Now comes along another group of people that go to Dell and say: "Hey Dell can you sell me a PC-- but I don't want Quicken, I don't want any of that pre-loaded software- heck I don't even want Windows. Can you just sell me the naked hardware box?" Dells "why of course, your price is.." (which is a considerable savings).

Now M$ comes along and says: "Dell you can't do that, you owe us a royalty." Dell then turns to me and says: "I have to charge you for Windows". "I don't want Windows" I say. "Ok, says Dell. I'll still give you the naked box, but I'm going to have to charge you for Windows." "Why?" I ask. "Intiut isn't forcing me to buy Quicken. I don't want Windows. Why do I have to pay for something that I don't want, didn't order and will not use?" There is no contract between M$ and Dell for Dell's naked PCs M$ has no control over Dell, which is an independent company.

So why am I forced to pay for an M$ license for Windows when I will not get the product? How is this legal?

Answer: its not. You put up a valiant try, but in the end, you failed to grasp the fundamental argument about M$ predatory business practices. If I buy a PC with M$ stuff loaded, well and good, but if I buy a naked PC and still have to pay for Windows without even getting a license -- heck that's Mafia practice.

M$ was not a party to the sale between me and the naked PC. M$ has no right to demand anything.

Over and out.

[BuddhaBoy]

You are just wrong, and wanting things different wont make them that way. I dont need to make a valient effort at what amounts to simple facts, because they are clear.

If you were right, you would find thousands of lawyers chomping at the bit to start a class-action suit on your behalf.

You are not. Wishful thinking wont get you anywhere.

[Utopia]

You are just wrong

Sigh. I guess I'm just not explaining the legal issues clear enough for you. DOJ has already ruled this behavior of M$ illegal -- that is a fact -- it has nothing to do with my wishing it.

If you were right, you would find thousands of lawyers chomping at the bit to start a class-action suit on your behalf.

Ah, where have you been for the last 10 years? Its already been done! DOJ, States Attorneys General, have already filed suit. They have already won! M$ is now violating their own consent decree. They have already said they wouldn't do what they are now appear to be doing. (that is interject themselves into the sale for which they are not a party). So, they'll get their a$$ whooped in court again.

[Bush2000]

Sigh. I guess I'm just not explaining the legal issues clear enough for you. DOJ has already ruled this behavior of M$ illegal -- that is a fact -- it has nothing to do with my wishing it.

First of all, the DOJ is a government agency. It doesn't "rule" on anything. That is the function of our judiciary, which is separate.

Second, Microsoft's contract with Dell stipulates that it will provide Dell with a Windows license provided that it doesn't ship "naked" PCs. But the contract doesn't specify that Dell needs to ship Windows. Understand? Dell can ship Linux, Solaris, BeOS, OS/2, AmigaOS, Commodore64 OS, DRDOS, etc. As long as the PC isn't naked, that's the deal.

Third, it isn't illegal because it does not impose the sale of Windows. It merely states that some OS needs to be present. There is a basis for this contract. It is intended to reduce software piracy. You and I both know that there are a lot of people out there who would love to buy a naked machine and install a pirated copy of Windows on it. Well, that's just too damn bad.

Fourth, you aren't forced to go with Dell. As somebody else pointed out on this thread, there are plenty of vendors willing to sell a PC without Windows to you.

Fifth, your real beef is with Dell. If they shipped a free Linux distro with their PCs, you would have nothing to complain about. But of course, that flies in the face of market reality. Dell already tried shipping Linux with its desktop machines and nobody bought them. This is fact.

Sixth, you don't get to dictate product specs to vendors. Get used to that idea. If you don't like it, go somewhere else or build your own.

[Bush2000]

Ah, where have you been for the last 10 years? Its already been done! DOJ, States Attorneys General, have already filed suit. They have already won! M$ is now violating their own consent decree. They have already said they wouldn't do what they are now appear to be doing. (that is interject themselves into the sale for which they are not a party). So, they'll get their a$$ whooped in court again.

The issue of naked PCs isn't covered in the DOJ settlement. Go do some reading. Your ignorance is breathtaking.

[PatrioticAmerican]

Try to buy a naked car without a stereo or a transmission. Perhaps you want a specific radio or transmission. You really haven't a clue about commercial product development if you cannot understand supplier agreements. You really just hate Microsoft, and that is about the only point in your arguments.

[Knitebane]

Nice try, but the email is correct.

It's not like we didn't know that this is something that Microsoft has been pushing for.

Here is the evidence from the hand of Microsoft's own head of their OEM business division.

Fear, Uncertainty and Doubt. Why do you continue to try to seed people's minds with doubts about the evidence against Microsoft when time and time again the evidence has held up?

Granted, this email in and of itself is not evidence. But there is plenty of other evidence that this email simply corroborates.

Making it look like this is all a big lie trumped up by the Vast Open Source Conspiracy is beneath the contempt of those of us who lived through the Clinton White House years.

Shame on you.

[BuddhaBoy]

Thank you, guys/gals.

Somethings are just beyond explaining, I guess. I think it is obvious that this individual has a problem with Microsoft.

[HAL9000]

Do you have Cable Television?

Do you have a TV set? Did the manufacturer require you to purchase a cable subscription with it?

[AFreeBird]

Don't be too hard on B2K. He's had his lips surgically attached to Gates' posterier for so long, he doesn't know any better.

[Knitebane]

The issue of naked PCs isn't covered in the DOJ settlement. Go do some reading. Your ignorance is breathtaking.

But it is covered in the 1995 consent decree that held off the previous anti-trust suit. If my memory serves, Microsoft promised to stop per-processor licensing in exchange for not being hauled into court. You have referred to this decree in other threads so I know that you aren't ignorant of it.

But mentioning it would be counter-productive to your alliegiance, wouldn't it?

So, what we have here is a consent decree agreed to by Microsoft seven years ago that says that they will not require OEMs to ship Windows on every PC, we have evidence that Microsoft has made a concerted effort to sink any OEM from shipping any other OS and now we have evidence indicating that Microsoft is using it's muscle to keep OEMs from shipping naked PCs.

The way my math comes out is like this:

No other OS + no naked PCs = Windows on every PC.

Which Microsoft promised not to do in a legal agreement with the US Government. I refer you to Section IV of the consent decree.

And that is exactly what the previous poster was referring to.