Why did Microsoft implement their new licensing policies and how is Dell circumventing them?

First attempt in 2000

In 1998, Ralph Nader asked Dell (and 5 other major OEMs) to offer alternate operating systems to Microsoft Windows, specifically including Linux, for which "there is clearly a growing interest Dell started offering Linux notebook systems which "cost no more than their Windows 98 counterparts" in 2000, and soon expanded, with Dell becoming "the first major manufacturer to offer Linux across its full product line" But by early 2001 Dell had "disbanded its Linux business unit".

The reason(s) for such a quick reversal remain the subject of debate. Court documents accused Microsoft of coercing OEMs to drop Linux:

Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: "I am thinking of hitting the OEM harder than in the past with anti-Linux actions" and will "further try to restrict source code deliveries where possible and be less gracious when interpreting agreements — again without being obvious about it," continuing "this will be a delicate dance"

While in a 2003 interview Michael Dell denied that Microsoft pressured Dell Inc. into doing an about-face with regard to desktop Linux, citing a lack of sales: "unfortunately the desktop Linux market didn't develop in volume. It's more of a server opportunity" but adding: "We continue to offer Linux on the desktop and there is nothing else to say." However, a 2004 report noted that Dell no longer offered preinstalled desktop Linux:

So what does it mean "factory installed Linux"? If you want Dell to install Linux for you, first add on $119. But here is the annoying part. They won't send you a computer with Linux pre-installed. They sell you the computer and the boxes of software on the side, and then they make an appointment to send you someone who comes to your house or business and installs it there.

Second attempt in 2007

On February 26 Dell announced that it had commenced a program to sell and distribute a range of computers with pre-installed Linux distributions instead of Microsoft Windows. Dell indicated that Novell's SUSE Linux would appear first.However, Dell on February 27, 2007 announced that its previous announcement related to certifying the hardware as ready to work with Novell SUSE Linux and that it (Dell) had no plans to sell systems pre-installed with Linux in the near future. On March 28, 2007, Dell announced that it would begin shipping some desktops and laptops with Linux pre-installed, although it did not specify which distribution of Linux or which hardware would lead. On April 18, 2007 a report appeared suggesting that Michael Dell used Ubuntu Linux on one of his home-systems. On May 1, 2007, Dell announced it will ship the Ubuntu Linux distribution.On May 24, 2007, Dell started selling models with Ubuntu Linux 7.04 pre-installed: a laptop, a budget computer, and a high-end PC.

On June 27, 2007, Dell announced on its Direct2Dell blog that it planned to offer more pre-loaded systems (the new Dell Inspiron desktops and laptops). After the IdeaStorm site supported extending the bundles beyond the US market, Dell later announced more international marketing. On August 7, 2007, Dell officially announced that it would offer one notebook and one desktop in the UK, France and Germany with Ubuntu "pre-installed". Dell recently announced that it would offer Novell's SUSE Linux Enterprise Desktop on selected models in China, "factory-installed".