In an interesting turn of events, Dell Computer founder Michael Dell, invested $99.5 million in Linux vendor Red Hat through his investment group, MSD Capital. The company, along with 100 investors, purchased $600 million Red Hat debentures in January 2005, according to regulatory filings made with the SEC. MSD’s purchase was the largest in the group and could potentially be converted in 3.9 million shares of Red Hat common stock.

Will this lead to Dell Computer playing favorites among the distros, and how much of an impact will favoritism from this Top-5 vendor have on the Linux market as a whole? Could Dell Computer be shopping around for an operating system with the goal of making the leap to systems vendor?