Bonum Certa Men Certa

Microsoft Kickbacks and Pressures on Dell: Lessons From Intel

"We should whack them [Dell over GNU/Linux dealings], we should make sure they understand our value."

--Paul Flessner, Microsoft



Summary: The commonalities between GNU/Linux and AMD are explained in the context of Dell

DELL received a lot of flak and public backlash recently, mostly because of its fair/unfair description of Ubuntu GNU/Linux, especially when it comes to security. Pressure from Microsoft was a possibility [1, 2] and Dell became the focus of attention for reasons it did not crave. More recently, Dell was again accused of a "Confusing Take" (regarding Windows vs. Ubuntu) over at Tom's Hardware and yesterday a storm started/volcano erupted in Slashdot, which linked to this British article. The headline says "Dell drops Ubuntu PCs from [UK] website... for now" and Glyn Moody wrote: "you mean *again*? can't they make their mind up?"



We only alluded to this news yesterday when we wrote about Intel's crimes with Dell. We did not mention this immediately because we waited for more clarifications and commentary. Here is how GreyGeek put it (he gave us permission to quote in full):

DELL stops listing Ubuntu computers in the UK

http://www.pcpro.co.uk/news/359740/dell-drops-ubuntu-pcs-from-website-for-now
Dell has stopped selling consumer PCs preloaded with Ubuntu from its website, and doesn't know when they're coming back.

A search for Ubuntu on the Dell UK website returns only one laptop - the Dell Latitude 2100 from the company's business range.
...

The Dell spokesperson also suggested Ubuntu is failing to win over the public. "The reason why they’re not on our main pages is because Ubuntu systems are primarily targeted towards advanced users and enthusiasts, and the vast majority of consumers purchase PCs with Microsoft Windows pre-installed," the Dell spokesperson claimed.

One reason why consumers might not be snapping up Linux-based systems is that Dell's own advice page warns anyone other than open-source developers to stick with Windows.
...

In checking perhaps I've found a web page that Dell missed?
http://www1.euro.dell.com/uk/en/business/4x_latit_2100/fs.aspx?refid=4x_latit_2100&s=bsd&cs=ukbsdt1
Clicking on the "Customize" button I find that the Ubuntu 9.04 offering is surrounded with a graphic PUSHING Windows 7.   It doesn't matter.  The other DELL Ubuntu offerings are:
http://www.dell.com/content/topics/segtopic.aspx/ubuntu?c=us&cs=19&l=en&s=dhs&~ck=anavml
Mini 10n
Inspiron 15n  (no webcam!)
Vostro V13 (no webcam!)
Latitude 2100 (no webcam!)

What a measly selection.    With "friends" like DELL Linux needs no enemies.

DELL's entire Linux effort for the last three years has been, IMO, one big gigantic FRAUD, with the intent to offer Ubuntu pre-installed on a few marginal boxes without significant customization available and for only one reason: so that Microsoft can avoid charges that it holds an illegal monopoly on the PC OEM desktop.  Which it does.

The only question remaining is: "What are the advantages to DELL for allowing itself to be controlled as if it were a wholly owned subsidiary of Microsoft?

Well, we have one answer to that question already.  Just yesterday (7/23) we learned that DELL corporate has agreed to pay a $100 Million fine, and Dell personally has agreed to pay $4 Million.  Two of his lieutenants have agreed to pay $4M and $3M each.   And what did the SEC fine them for?  
They failed to disclose material information to investors and used fraudulent accounting to make it falsely appear that the company was consistently meeting Wall Street earnings targets.

If THAT is a crime then Microsoft is guilty as well. That's how they got to the top of the pile they are setting on today.    What DELL actually did was take payoffs from Intel to not use AMD chips.
The SEC charged that Dell did not disclose to investors large “exclusivity payments” the company received from Intel Corporation to not use central processing units (CPUs) manufactured by Intel’s main rival, Advanced Micro Devices Inc. (AMD).

“It was these payments rather than the company’s management and operations that allowed Dell to meet its earnings targets,” the SEC said.  “After Intel cut these payments, Dell again misled investors by not disclosing the true reason behind the company’s decreased profitability.”
...
The SEC’s complaint charged that the exclusivity payments made by Intel to Dell for not using CPUs made by AMD grew from 10 percent of Dell’s operating income in fiscal year 2003 to 38 percent in fiscal year 2006.  It peaked at 76 percent in the first quarter of FY 2007.

In fiscal year 2007, after Dell announced its intention to begin using CPUs made by AMD, the company and the individuals charged failed to disclose the basis for the company’s sharp drop in its operating results.  “In dollar terms, the reduction in Intel exclusivity payments was equivalent to 75 percent of the decline in Dell’s operating income” the SEC said, and Messrs. Dell, Rollins, and Schneider told investors in an earnings call “that the sharp drop in the company’s operating results was attributable to Dell pricing too aggressively in the face of slowing demand and to component costs declining less than expected.”

Intel is the subject of antitrust lawsuits brought by the Federal Trade Commission and several states.  In November 2009, Intel agreed to pay AMD $1.25 billion as part of a settlement in a private antitrust suit brought by AMD.


This reveals the injustice in prosecuting corporate white collar crime: that Dell and the other people involved at both companies did not face CRIMINAL prosecution and didn't even have to admit guilt, even though there was enough evidence to force them to pay hundreds of millions in fines, which amounted to about 10% of their annual net profit.  Perhaps if Dell and the Intel management and major share holders had to spend some hard time in jail they wouldn't be so willing to flaunt the law for obscene profits.  It's like a hand-slap and defacto approval of their behavior.

DELL's behavior with Intel suggests that DELL is staying afloat, despite the poor quality of their machines and their high return rates, because Microsoft is paying them to NOT include Ubuntu on their desktops in a significant way, including not giving Ubuntu front page representation.  It also raises questions about the other PC OEMs who won't free up their desktop for competition against Microsoft.

How Microsoft got to the top of their pile of cash is shown specifically here:
 http://www.billparish.com/msftfraudfacts.html
Financial Pyramid Building Techniques Being Used by Microsoft:

Stock option programs are an excellent benefit and many companies use them responsibly. At Microsoft, however, stock option accounting is only one of its many pyramid building techniques, what could be called a cash generating component. Additional pyramid building techniques include the following.  It is important to note that the genius of the pyramid scheme is to leverage share growth from investors using a passive investment approach based upon indexing to the S&P 500.  Most smaller and mid size technology firms are not in the S&P 500 and therefore are locked out of this key aspect of the pyramid from the beginning.

1) Earnings Management: The first and most important tool Microsoft uses is the manipulation of earnings to ensure analysts' expectations are met.  According to an ABC News 1/22/99 article by Michael Martinez, Microsoft’s own internal auditor, a respected 30 year veteran and former partner of Deloitte and Touche, was fired in 1996 after informing management that their earnings manipulations were illegal and violations of the SEC and FASB laws.  He was given the option to resign or be fired and later settled for $4 million after suing under the Federal Whistle Blowers Act.
2) Speculating on Their Own Stock:
3) Convincing Employees to Take Less Real Wages:
4) Publicly touting the stock
5) Controlling the media.
6)  Stock Option Accounting: (You really have to read this one.  It explains how Microsoft used YOUR tax money to pay for developing Win95!
7) Purchasing future sales via equity investments:
8 ) Managing the financial analyst community.
9)  Trying to Discredit Those Seeking to Expose the Scheme:
10)  Money Laundering:
11)  Corruption of Higher Education:
12)  Manipulating Investors Who Use a Passive Approach Relying on Indexes Such as the S&P 500.

Several Impacts from Microsoft's Financial Pyramid Scheme Include the Following:

This scheme led by Microsoft is having many unexpected impacts, a few of which are noted here.  The upcoming book will  detail additional impacts and also explain how this situation affects a variety of people in different occupations.

1)  Government Will Be Defunded.
2)  The Retirement System Is Being Plundered.
3)  Business Owners Are Exposing Their Personal Assets By Not Paying Enough Attention To Their 401K
4)  The Dollar Is Being Devalued In Relation to the Yen.
5)  False Inflation is Emerging.
6)  The Integrity Of The Markets Is Being Destroyed
7)  The Fraud Is Accelerating
8 )  Microsoft auditor, Deloitte and Touche, issued a "clean" audit opinion. (The auditor for  Deloitte and Touche who originally did the work reported several of the problems mentioned above and was fired and his character impuned publically.  He sued and won almost $5M in damages.
10) Significant one day stock value declines at major corporations that pay more in cash wages than stock options are accelerating.
11)  Microsoft organized a lobbying effort to defund the Department of Justice, using supposedly non-partisan groups like the Citizens for a Sound Economy.
12)  Conversions to cash balance pension plans are increasing.  
>The State Gov agency where I worked switched to "Cash Balance" a couple years before I retired.  I had the option to not switch.  

This is another pyramid impact. What IBM employees still don't seem to realize is that their lost pension benefits are resulting from fraud at Microsoft.  Microsoft is pilfering these cash balance plans into its pyramid scheme by overstating its earnings, thereby drawing a larger percent of the index based investment on the S&P 500 and correspondingly making it more difficult for companies like IBM to compete.  This forces these companies to cut back on real benefits in an effort to keep its earnings and stock price up.  This was also clearly identified in the original study.




These are some interesting thoughts on Dell, GNU/Linux, Intel, and Microsoft. Connected to this news (via Slashdot) we have reports from The Economist and from the Financial Times.

Intel seems close to putting behind it a decade of market abuse complaints from round the world in a settlement with the US Federal Trade Commission this week.

The deal will include concessions on the US chipmaker’s business practices, according to a person familiar with the settlement, but will not include fines because the FTC does not have the authority to issue civil penalties.

[...]

It also alleged Intel secretly redesigned key software to stunt the performance of rivals’ chips that were licensing its “x86” microprocessor design.

But, in addition, the FTC alleged that Intel was repeating in GPUs its tactic of slowing down competitors, such as graphics chipmaker Nvidia, so that it could catch up.


As we summarised this yesterday, Microsoft, Intel, and Dell are exceptionally corrupt and it pays off for them.

Comments

Recent Techrights' Posts

European Patent Office (EPO) Series: The Brotherhood of São Bento
The Palácio São Bento – or São Bento Palace – is the seat of the Portuguese National Assembly in Lisbon
Brett Wilson LLP Reported to Police for Trying to Throw Large Parcel Into Our Home
This morning the campaign of intimidation...
Slop Has no ROI, an Economy Built on False Assumptions of Slop is Doomed
we're all going to suffer from this Ponzi scheme
The Cyber Show Has "Exciting Guests Coming" and a Gemini Capsule
"Site development is ongoing but now settling into a more stable form"
 
IBM's Quantum Bubble Already Deflating
Shares down over $55 in a few days
SLAPP Censorship - Part 101 Out of 200: Women Come to Realise They Don't Wish to Participate in Attacking Vulnerable Women
It relates to another topic that we shall be covering in the coming weeks
Links 08/06/2026: Proprietary Loaded With Security Holes, Armenia Defies Russia
Links for the day
Gemini Links 08/06/2026: NetHack 5.0.0 and Slop as Cannibalism
Links for the day
Links 08/06/2026: "Rising Emissions, Depleting Water" Due to the Pyramid Scheme of Slop; "Canada Needs to Rebuild Public Telecoms"
Links for the day
GAFAM Bots Are Not "Good Bots"
There's nothing "Good" about Google
Links 08/06/2026: Criticism of Microsoft Trying to Criminalise Pointing Out Bug Doors, TikTok Now "Climate-Denying Social Media App"
Links for the day
GNU/Linux Measured at 10% in Liechtenstein This Month
it seems like statCounter wrongly classified some GNU/Linux clients as Mac clients and is now issuing a correction
Communicating With Freedom - Part III - Quibble Envisioned as a New and Easily Accessible Communications Platform Based on LibreJS
the FSF really needs to become more active if not proactive in promoting those sorts of things
Clownflare Says Majority of Web Traffic is Now Bots, But the Net is Another Story
Bots are to Clownflare what lawsuits are to lawyers
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, June 07, 2026
IRC logs for Sunday, June 07, 2026
The Strikes at the European Patent Office Planned to Carry on for the Entire Year, Maybe Future Years as Well
There's a cautionary tale somewhere
Number of Patent Grants Has Plunged 23% Amid Strikes at the European Patent Office, Today There Are More Strikes (Strike Participation at Over 3,000, More Than Doubled Since Winter)
There is a growing crisis at the European Patent Office
E.E.E. Still Ongoing, the War on Copyleft/GPL Enables That
It also imperils security.
Gemini Links 07/06/2026: Lynx in the 'Modern' Web and 'Overcooked' (Plagiarised by LLM) Code
Links for the day
Links 07/06/2026: Java Needs Seawall, Egypt Blasted for Arbitrary Detention of Activists
Links for the day
SLAPP Censorship - Part 100 Out of 200: Interlude and Outline of the First Half, 3+ Months That Got Us Death Threats Connected to Brett Wilson LLP (and Cyber Attacks That Are Difficult to Attribute)
This week we plan to have a good time
Banning Things Versus Teaching People the Reason/s to Shun/Boycott Those Things
Prohibition has its limits
Links 07/06/2026: NASA's Mars Maven Declared Dead, Telegram Founder Pavel Durov Bemoans Russia's Crackdown
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, June 06, 2026
IRC logs for Saturday, June 06, 2026
Gemini Links 07/06/2026: How to Train Your Dragon (2010) and "Six Days of Play"
Links for the day
Links 06/06/2026: 'Epstein Problem' in Board of Directors of Microsoft, Surveillance Giant Google Under Legal Threats for Online Misuses
Links for the day
Software Freedom Takes a Lot More Than Coding
some of the roles in the Free software community that don't receive (m)any grateful words
Ubuntu is Losing to Other GNU/Linux Distros
"Linux Mint"
Old Articles Explaining That Patents - Especially Software Patents - Are Bad for Innovation
We've omitted more than 50% of the articles we had gathered as candidates for inclusion
European Patent Office (EPO) Crisis: Huge EPO Strikes, Profound Corruption, and Cocaine Use by Managers Tolerated
These strikes won't be ending any time soon
Why GNU and FSF Will Choose AV1 Over AV2 (It's More Widely Supported)
for the foreseeable future they'll stick with AV1
Mass Layoffs (RAs) and PIPs (Excuses to Sack) at IBM: Insiders Tell No Relation to Actual Performance
If many thousands are impacted by this, then certainly it is newsworthy
Links 06/06/2026: LinkedIn Infested With Spies, Ethernet WiFi Router On Pi Pico 2W
Links for the day
25 Years With PalmOS
That my Palm PDA still works in 2026 (not in mint condition but close to that) says a lot about the "build quality" of gadgets 20+ years ago
Why We Dumped Online Shopping (Groceries)
subsidies kept the "online" stuff artificially cheap
Microsoft Fell to All-Time Low in Monaco Last Month
So says statCounter anyway
Lawsuits That Don't Work
Not as expected anyway
SLAPP Censorship - Part 99 Out of 200: Graveley and Garrett Seem to Have Crashed Brett Wilson LLP (Worse Than Taking Russian Oligarchs as SLAPP Clients)
a state of disarray
Microsoft Has Spent Months Preparing Lists of People to Cull in Massive Wave of Layoffs (Allegedly Start of July)
There is some consensus that we're weeks away from mega-layoffs at Microsoft
Gemini Links 06/06/2026: "Competing" With LLMs and "Automation of Any Kind"
Links for the day
Links 06/06/2026: 'Linux' Foundation Openwashing Slop on Microsoft's Payroll, Ukraine Wants Permanent Ceasefire With Russia
Links for the day
50% of the 'Gains' Made by "Quantum" Hype Already Evaporated
"It was all hype about quantum nonsense. Heading back to reality now. Expect sub-$220 after earnings release next month."
Heap of Trash Online, Not Just the Fault of LLM Slop But Enabled by Slop
Google News has just promoted a pair of prolific slopfarms
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, June 05, 2026
IRC logs for Friday, June 05, 2026