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Michael Dell Invests $100 Million in Red Hat

Dell Inc. chairman and founder Michael Dell is investing $100 million in Red Hat, the Linux distributor that often stands in as a symbol for the open-source movement's challenge to Microsoft's OS dominance.

The Dell investment comes through Michael Dell's private investment firm, MSD, which bought $99.5 million in debentures from Red Hat. CNN/Money reported the transaction this week, citing Securities Exchange Commission filings.

Dell's purchase is the largest share of $600 million in debentures offered by Red Hat in January 2004. Debentures are similar to bonds.

As of the Windows 2000 launch five years ago, Dell Inc. was one of Microsoft's most visible partners. While the companies still work closely together, the nation's No. 1 PC maker often aligns itself with Red Hat in major deals and announcements.

Meanwhile, CNET News.com cited an unnamed source in reporting this week that Microsoft CEO Steve Ballmer met Red Hat CEO Matthew Szulik for a meal at a restaurant in New York in late March. Neither company directly confirmed the meeting.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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