Linux seller Red Hat will be a prime beneficiary of the move. Dell, which is well behind Compaq Computer in sales of Linux systems, will work with Red Hat to beef up marketing, support and Linux itself, the companies announced today.
Dell has been the computer maker most closely aligned with Microsoft and Intel--the two halves of the "Wintel" alliance--but today's news marks a new step back from Microsoft. Under the new arrangement, Dell will elevate Linux to the status of Microsoft Windows and Novell Netware, building ties with Red Hat's programmers, customer support team, sales force and others.
"There's a lot of marketing hype around this, but I think it is a pretty significant announcement that Dell wants to push Linux," said Technology Business Research analyst Brooks Gray. "They're straying more from the Microsoft platform. And clearly they've had a lot of demand for (Linux)."
Though financial terms of the deal were not disclosed, Red Hat expects to make money by getting new customers in big business, said Red Hat chief executive Matthew Szulik.
These sort of deals are central to Red Hat's future. Because Linux software can be obtained for free, Red Hat and others expect to thrive by offering Linux-related services. Chairman Robert Young has said that eventually, the company could become the Wal-Mart of the Linux world, offering a panoply of products and services.
Dell, for its part, hopes the alliance will increase pressure on traditional rivals IBM, Compaq, Hewlett-Packard and Sun Microsystems by allowing Dell to sell more equipment to build up the Internet, said Mike Lambert, senior vice president of Dell's enterprise systems group.
As first reported by CNET News.com, Dell looked at embracing Unix to compete better in an Internet-dominated computing world. In February, Dell settled on using Linux instead, though it didn't rule out a version of Unix called Monterey under development from IBM and Santa Cruz Operation.
Linux is a clone of Unix, similar in design and function though not as battle-tested or as able to run on super-powerful servers. Lambert acknowledged the lead traditional Unix has over Linux but argued that Dell isn't interested in taking on the entire Unix server market and that its alliance with Red Hat will help improve Linux.
"I think it's a fair statement that at the very high end of processing, there are five-nines kind of requirements (that a computer stay up and running 99.999 percent of the time) that have been baked into Unix variants over the last five to 10 years. That's really not where we're aiming at this point in time," Lambert said.
The Dell-Red Hat alliance fits well with the strategy of Intel, which like Dell has invested in Red Hat. Intel views Linux as one of three major operating systems that will prevail on its upcoming Itanium chip and its successors in the "IA-64" family, along with Windows and Monterey.
Though Dell and Red Hat called today's initiative the "one-source alliance," Red Hat is hardly the sole source for Linux products and services at Dell. Dell executives said the company will in fact maintain its relationships with TurboLinux and Linuxcare, two Red Hat competitors.
Dell sells computers in Japan and elsewhere in Asia using TurboLinux's version of Linux, said Russ Holt, general manager of Dell's workgroup server group. And though Red Hat is the default company to provide support for Linux computers sold by Dell, customers may select Linuxcare as well, Lambert said.
In the alliance, Dell and Red Hat will work jointly to improve Linux's high-end abilities with technologies such as clustering, which ties together multiple servers to share workload or step in for one another if one fails, Szulik said. In addition, Dell and Red Hat will work to tune Linux for specific hardware designs such as Dell's special-purpose PowerApp servers.
Keeping servers up and running around the clock means more opportunity for services revenue for Dell and Red Hat. Ensuring that level of performance requires a lot of planning as well as ongoing monitoring when the system is up and running, services for which companies charge premium rates.
Though customers will pay Dell for such services, some of the money will flow to Red Hat, depending on who's actually doing the job, Holt said.
High-availability services also require close collaboration between the hardware and software developers, added Red Hat chief technical officer Michael Tiemann. "It's now possible to align the hardware and software," he said.
The companies will work together to prepare Linux for Intel's Itanium chip.
Dell and Red Hat also announced today that automaker Toyota will buy 1,400 Dell computers with Red Hat software to serve as information kiosks in all Toyota and Lexus dealerships in the United States.