Dell Guilty of Fraud; Server Sales Lackluster; more…

Dell is guilty of fraud, deceptive advertising and failure to honor its warranties, service contracts and rebates, the New York State Supreme Court has ruled.

There are reports aplenty about the ruling all over the web today. Here’s one from The Register that also offers a link to a PDF of the ruling.

Among the findings
• Dell did not give customers the technical support they were entitled to under warranty or service contract
• Dell failed to provide on-site repair to customers who bought it
• Dell pressured customers with onsite service contracts to repair the boxes themselves
• Dell discouraged customers from seeking technical support with long wait times, frequent transfers and disconnections
• Dell failed to provide promised rebates
• Dell frequently lured customers to purchase products with “no interest” or “no payment” financing promotions — for which even those with very good credit scores were denied. Dell then often failed to clearly inform the customers they were unqualified for the promotional terms, leaving them to unknowingly buy a system at high interest rates. (Perhaps Dell, being such a large company, could not guarantee that all its sales reps understood the rules of engagement …)

Dell has said it will defend itself vigorously against this ruling.

Next up, the judge will decide on how much in damages Dell should pay. Dell’s earnings report comes out tomorrow.

Midmarket companies are cutting their capital budgets and, in turn, their spending on software, according to a new survey from ChangeWave.

SearchCIO-Midmarket.com reported the results here that showed that 25 percent of respondents who took the survey last month said they are spending less on software this quarter than in the first three months of the year. That percentage is higher than it’s been in two years.

When asked why they were cutting back, 13 percent said a general slowdown in business and budgets.

But some technologies remained hot. Companies selling virtualization and security software saw slight increases in customer spending. On the flip side, losers were application software products such as ERP and CRM.

With that survey’s results, it’s not surprising that the server market in Q1 grew at only 3.5 percent in revenues, according to IDC’s most recent report on server market share. eWEEK reports that the market for servers in the United States was the weakest overall due to the slowing economy. Revenue for x86 servers grew by 4.4 percent, the slowest growth rate in almost two years while the market for non-x86 servers increased just 2.5 percent.

Separately, HP announced its first software-as-a-service (SAAS) offering for application security, according to eWEEK.