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

Over at Tux Machines...
GNU/Linux news for the past day
Microsoft Layoffs and Closures Now Reported in Africa
Microsoft Uninstalls Nigeria as it closes African Development Centre (ADC) in Lagos
 
Software Enshittification or Freedom? It's not a hard choice!
Reprinted from Alexandre Oliva
Links 09/05/2024: More Microsoft Layoffs on the Way
Links for the day
Amid Microsoft Layoffs in Nigeria GNU/Linux Climbs Above 6% Market Share (Not Including ChromeOS)
Hundreds are being laid off by Microsoft in Nigeria, based on yesterday's reports
[Meme] Blame the Robots or the 'Hey Hi' (AI), It Always Works in Today's Media
Companies do not have financial troubles! They have "efficiencies"...
News Reports Say Many More Microsoft Layoffs on the Way, Rumours Say Red Hat Also Imminently a Target
Microsoft is slipping out of control
Links 09/05/2024: Diplomacy Efforts With China, AstraZeneca Stops Experimenting With COVID-19 Vaccines
Links for the day
IRC Proceedings: Wednesday, May 08, 2024
IRC logs for Wednesday, May 08, 2024
Gemini Links 09/05/2024: Registered Computer Professionals and TLS (The Long Slog)
Links for the day
Links 08/05/2024: Android Malware and "AI" Hype
Links for the day
[Meme] Technical Committee With People Who Are Not Technical
the computing/computer industry being occupied by people who lack suitable background
The Demise of Computer Science Education
Education is essential for the future; without it, whole nations will perish
[Video] Prisons for the Minds and for Tech Workers
Today's video talks about what happens to workforces (across disciplines) in recent years
[Meme] Struggling to Leave Its Nazi Past Behind
digital arson
Microsoft Declines to Talk About How Many People It Has Just Laid Off
Hours ago in IGN: "Microsoft did not say how many staff will lose their jobs, but significant layoffs are inevitable. IGN has asked Bethesda for comment. Microsoft declined to expand further when contacted by IGN."
Microsoft Windows in South America: From 99% to 87%
the latest from statCounter
It's Rather Obvious Why They Try to Silence Richard Stallman, Eben Moglen, and Daniel Pocock
Some of them already sent physically menacing messages to Daniel Pocock
IRC Network of Techrights Turns 3 (or 16 if We Count the Freenode Days)
In a few months IRC turns 36
Sedating Oneself (and Shareholders) With Fuzzy Buzzwords and Pointless Acquisitions
IBM trying to buy time
Clickfraud Spamnil Ran Out of Clickfraud Budget, Apparently
sooner or later charlatans and frauds run out of steam
Techrights Gets Under the Skin of Bad, Corrupt, Immoral People (That's a Good Thing)
Journalism is the lifeblood of democracy and free societies
Companies Do Not Shut Down Offices and Lay Off Staff en Masse (Morale and Reputation Issue) Unless They're in Deep Financial Trouble
Microsoft has been faking its financial performance for years
IRC Proceedings: Tuesday, May 07, 2024
IRC logs for Tuesday, May 07, 2024
Over at Tux Machines...
GNU/Linux news for the past day
[Video] Leaving Microsoft Behind for the Sake of National Security
Threats to "National Security" aren't some users with an Android phone but Microsoft at the root of things
GNU/Linux and ChromeOS Now at 6% in France, According to statCounter
numbers from statCounter
Gemini Links 07/05/2024: Music Spotlight and Network Knobs
Links for the day
Only Weeks After Microsoft Closed Offices and Studios It is Closing Several More (Many Layoffs, Still Deeply Debt-Saddled)
When the sad news writes itself
Bolivarian Republic Of Venezuela: GNU/Linux Reaches 9% (ChromeOS Included)
Venezuela must have lost interest in some American proprietary software when users were locked out of their own data (Adobe) and the costs could no longer be justified
[Video] Microsoft is Like Big Oil, Big Tobacco, and Other Perpetrators of Fear, Uncertainty, Doubt/Fear-mongering
openwashing, Microsoft lobbying, and Microsoft subsidies (e.g. bailouts in the form of 'defence' contracts)
Security & Debian: Urgent: New Feed URLs after another WIPO censorship
Reprinted with permission from Daniel Pocock
World Press Freedom Day: WIPO censors Debian suicide cluster
Reprinted with permission from Daniel Pocock
Gemini Links 07/05/2024: Smashing Windows (Moving to GNU/Linux) and Mastodon Time-wasting
Links for the day
Links 07/05/2024: Pulitzer for Supreme Court Expose, New Threats to Media Reported
Links for the day
Links 07/05/2024: Cheap EVs and Cloudflare Layoffs
Links for the day
Berlin police declined to investigate FSFE Nazi comparisons
Reprinted with permission from Daniel Pocock
[Meme] Communities Governed by Parasitic Elements and Girlfriends (Who Can't Understand Those Communities)
Karen Sandler and Molly de Blanc present at DebConf18
[Meme] You Can't Kill an Idea (or Facts)
Thankfully, in Western societies, there's still due process, rule of law etc. You don't just hire assassins or imprison critics
[Meme] Software in the Public Interest (SPI), Inc, Values Articles of Daniel Pocock at ~$5,000 Each (and Fails to Hide the Facts)
we are laughing, not grieving
IRC Proceedings: Monday, May 06, 2024
IRC logs for Monday, May 06, 2024
Over at Tux Machines...
GNU/Linux news for the past day
[Meme] About 2,564 Internet Sites Now at Risk of Hostile Takeover by Microsoft-Sponsored Software in the Public Interest (SPI)
WIPO censors Debian suicide cluster
Links 07/05/2024: Burning Plastic Waste, Facebook Censoring Politicians
Links for the day
Gemini Links 07/05/2024: Smashing Windows (Microsoft Losing Users to GNU/Linux), Sixty Years of BASIC
Links for the day