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Dell: No shelter against SCO suits

CEO Michael Dell says that despite his company's embrace of Linux on its servers, it won't be offering customers indemnification against lawsuits from the SCO Group.

Despite embracing the use of Linux on its computers, Dell will not be offering its customers indemnification against lawsuits in the SCO Group's campaign against the open-source operating system.

That was the word from Michael Dell, company founder and chief executive, expressed in a keynote speech Tuesday at an investor conference in New York that was broadcast over the Internet. Dell not only addressed the SCO matter, but also information technology trends and issues affecting the computing giant.

SCO, which claims its Unix intellectual property has been illegally incorporated into Linux, last May sent warning letters to roughly 1,500 large corporations around the world that they could be liable for using Linux. SCO shook up the tech world last March, when it filed a lawsuit against IBM, alleging that Big Blue improperly used its Unix technology to improve Linux.

"We have seen a change (in the Linux momentum) among really large customers," Dell said. He added that some large customers have asked for indemnification from Dell, should SCO file a lawsuit against them for using a Dell computer loaded with a Linux product.

But Dell said: "We don't offer it."

Round Rock, Texas-based Dell earlier this month expanded its relationship with Red Hat, the leading Linux provider. The computer seller bundles Red Hat's products with its servers and offers customer support in partnership with the software maker.

Dell also acknowledged that his earlier predictions--in which he said notebooks would account for a sizable share of the computer market--have yet to come true.

"A long time ago, back in the mid-to-early '90s, we thought notebooks would be shipping in greater volume. But that didn't happen," Dell said.

He noted the price difference between desktop and notebook machines did not narrow, but in fact widened, since the mid-1990s.

Dell said he doubts the day will ever come when notebooks account for two-thirds of consumer PC shipments. Although notebook sales have steadily climbed since 1998, they represented only 27 percent of shipments worldwide in the second quarter of this year.

During the keynote, Dell also addressed his company's decision to pull back from the eight-processor server market.

"Eight-way (servers) are less than 1 percent of the market and shrinking pretty dramatically," Dell said. "If our competitors want to claim they're No. 1 in eight-ways, that's fine. We want to lead the market with two-way and four-way (processor machines)."