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Michael Dell's LinuxWorld keynote

Welcome to LinuxWorld San Jose 2000. Below are my notes from the keynote speech for this event, from Michael Dell. There was not a lot of new information in the speech, though some of the question/answer pieces below are amusing/interesting. The primary importance of the keynote seemed to be the essence of Michael Dell giving his official blessing to Linux. Dell was also clearly showcasing their involvement with Eazel.

IDG speaks first, stating that LinuxWorld is now the largest Linux Expo in the world and issuing thanks to exhibitors and attendees. This year, LinuxWorld has more than 200 companies represented and over 170,000 square feet of exhibit space. There were 150 more companies that wished to exhibit that they could not accommodate.

Michael Dell was introduced with the lead-in, "Life is a beautiful thing, as long as I hold the string". It was mentioned that Michael was the youngest CEO to run and leave a Fortune 500 company.

Michael Dell comes on. "Good morning". Michael started by pointing out that the graphics for his presentation were prepared using the Eazel file manager. "We see Linux as a significant growth opportunity for Dell." Below are paraphrased comments from Michael's talk.

Linux was born as an open source operating system, at the same time Dell was born as a company. "We believe that Dell and Linux are a very powerful combination."

Linux makes far more sense as an economic model than a proprietary operating system, both because of the low cost and its ability to run on multiple hardware platforms. Most importantly, it is the most cost effective platform.

Linux can be a highly disruptive technology to some business models, of pretty dynamic proportions. Linux is used internally at Dell in the manufacturing process, to handle customer-specific installations. We stage and load these installation images off of Linux, saving us millions of dollars per year. We expect to see more savings as we implement this Linux-based procedure world-wide.

We're making it easy for our customers to get Linux. Our interest came when our customers asked for it. Our customers were doing a lot with Linux, but we weren't doing much to support them. Now we have Linux across all of our products and we are developing tools to make it easier to use. Our investment in Eazel is an example of that. On the desktop, Linux now has an equivalent user base to MacIntosh, which is pretty impressive, plus Linux has the largest growth of any operating system.

Dell Ventures is a capital investment arm of Dell that invested originally in Red Hat, is now invested in TurboLinux, Linuxcare, Collab.net. We are interested in more ventures in this area. If you have one, check dellventures.com; we want to hear from you.

We expect $370 billion dollars of expenditures in Internet hardware over the next 5 years. IDC expects a 34% growth rate per year for Linux from 1999-2004. The growth in proprietary Unix systems is expected to be negative. Growth in the server market will come from getting more businesses on-line. Every organization in the world is figuring out how to get on-line and Linux is key to that. Dell has been targeting this server market heavily. In less than three years, Dell became the number one provider of workstations in the US and the world. We now have 22% of the server market. About 10% of our servers now run Linux, more than any of our major competitors, and we want to drive that figure even higher.

There is more that needs to be done. 90% of the Fortune 500 companies are Dell customers. Dell will spend close to 3/4 of a billion dollars to build applications to support this market. We're offering services, consulting, tuning, backup, cluster designs, system migration services. Ultimately, it comes down to a direct relationship with the customer and be in tune with what they want and need.

Linux customers include supercomputing clusters. 96 Dell workstations replaced an AIX cluster at one research facility.

At Dellhost.com, you'll find 40% of the customers have chosen to use Linux.

Bill Arducci (sp?) from Toyota was brought up to join Michael Dell. Toyota looked at ways to provide rich content to Toyota dealerships via the Internet that would be well accepted. Due to the large amount of dynamic content they wanted to provide and the small bandwidth available to each dealership, they needed to use a dynamic cache system to deliver the content locally. However, the standard cache management techniques produced an unacceptably high "first-person" penalty. Two years ago, they approached proprietary cache vendors and asked for changes to their code to eliminate this penalty. Six months later, the proprietary vendor they contracted with was unable to deliver. An engineer sat down, installed a Linux system and, In two weeks, delivered a working Linux prototype.

The cache server was displayed on stage. It looks like a router, a thin black box with color-coded cables, no way to install a monitor or dink with it easily. An example of the type of content provided would be extremely detailed information on every new model, provided to the technicians working on the cars. We are deploying 1300 of these boxes, one in every Toyota dealership in the country.

Michael: Just to summarize, we are using Linux, our customers are using Linux in a dramatically increasing manner. Ultimately, we are playing to win and feel that Linux and Dell together make a very powerful combination.

Question and Answer Period

A: There is an increasing focus on Linux from developers, including traditional application developers. As the size of the community grows, the incentive to develop the applications grows. Unix is now centered around Solaris and Linux; we don't think Solaris is the answer, we think Linux is.

Q: Is your support of Linux based on an assumption that DOJ will split Microsoft and MS will start developing for Linux as well?

A: No. (Laughter)

Q: What is Dell doing to support Linux?

A: We are supporting Eazel; check our booth. Plus, all of our platforms, client products, are now certified, tested and approved to run Linux. We're working heavily in the driver world. How do we get the chip companies, the hardware companies, to develop drivers for Linux? We sell so much hardware that we can leverage our relationships with the manufacturers and push these companies to give us drivers, to give the world drivers, for their hardware. We aren't there yet, but we are making significant progress.

Q: Compared to VA Linux, IBM, that have lots of Linux developers, how do I know you can support us, how do we know you're not just here to sell hardware? (Lots of applause)

A: We sell a lot more hardware than VA Linux and IBM. Are we going to contribute to the kernel? No, we're not. We're going to use Linux, we are going to provide Linux. As a product becomes established, high volumes require a different kind of company. We have a global support structure. We are spending more R&D dollars, in percentage, on Linux than any other platform. (No applause)

Q: Your e-commerce systems are mostly Windows. Are you planning on converting those to Linux?

A: We aren't making a commitment for converting everything to Linux. We discovered we were using Linux more than we knew and we are committed to using the best solution.

Q: I checked your website and only found two desktop models on your website that were running Linux. Do you think Linux is vulnerable to attack based on software patents?

A: Look at http://www.dell.com/linux. Software patents are tricky. I know that there are vendors out there wanting to defend their intellectual property. Conversely, there is a tremendous momentum behind Linux and open source. The laws are out of date and it is time to rewrite them.

Q: Five years ago, your position was very different. What happened to change your mind and when will your products for Linux be priced equivalently to the Windows versions.

A: Our customer problem solution tool taught us how many of our customers were using Linux. Then, we saw customers doing their own work to get Linux to work on our products. That changed our minds. We started moving this direction around two years ago.

Q: Just ordered a Dell laptop, had to pay for Microsoft operating system and Microsoft office, when will this change?

A: Go to dell.com/Linux and you can get it now.

Q: Bruce Perens, how can we keep from destroying the magic as the money pours in.

A: We have to prevent Linux from fracturing or companies from grabbing a piece of it to make it their own. The key thing is for people to maintain their principles and speak up.

Q: Do you see Linux as relevant outside the Intel architectures and what is the status of IA64.

A: Linux is relative on other platforms, but how relevant are those other platforms? With Itanium, there is a lot of interest in Linux. The answer is that the winner will be the platform that delivers the best value and I see tremendous life in the Intel platform.

Q: Benchmarks for Linux on Dell hardware.

A: Just put a press release out about that. We agree with the Linux-favorable benchmarks and are happy about it.

Q: Why is there a tax on buying Linux equipment from Dell? The same hardware costs more running Linux than Windows?

A: We have a cost basis, not a tax. We take a cost and a markup, which can be different for different products. We spend about 10 cents per dollar on operating costs because of our scale. We're capitalists and need to make money for our shareholders.

Q: Did not answer to question. Is there a secret obligation to Microsoft.

A: Absolutely not. I'm from Texas, so please make your questions more direct. (Laughter)

Q: I'm from Texas, too, so I'll be direct. Last year, you sponsored a meeting called DirectConnect in Austin, Texas. I believe Bill Gates was present and even stayed at your home for that meeting. Was Linux represented then and will it be next year?

A: We aren't going to take sides. We'll provide the products that our customers want. They want Linux. If you come this year, you'll find more mention of Linux than the volume it currently represents in the market, due to its tremendous growth rate.

End of Michael's Q&A period.

Linus Torvalds award to Debian

Linus called Wichert Akkerman up to accept the award. "Debian is obviously the operating system most similar to Linux. Debian is being developed the same way as the Linux kernel, with distributed developers all over the world. We'll see how the community deals with spending $25,000." (Audience chuckles)

Wichert. "Thanks to Linus and the whole Linux community. We have a press conference later today and a party later, for those who also enjoy free beer."