Oracle to support Red Hat Linux

By Derek Sooman on October 26, 2006, 6:04 AM
Update: Red Hat responds here.

Oracle chief executive Larry Ellison has said that his company will offer support for the Red Hat Linux distribution. Ellison claims that a lack of enterprise support for Linux has slowed the adoption of that OS, and that increasing the adoption of Linux in the enterprise will only happen if proper support is given. Red Hat support customers will be able to easily and quickly switch from Red Hat support to Oracle support.

Oracle also plans to clone Red Hat's Linux based on the source code produced by the company, as opposed to creating their own Linux distribution. Ellison has vowed that software certified for Red Hat's Linux will still work on this clone.

"If your application runs on Red Hat today, that application will run unchanged when you're getting Oracle support," Ellison said. "It's very important not to fragment the Linux market. Every time Red Hat comes out with a new version, we're going to sync our version with that version. All we add is bug fixes."
Ellison has long promised that Oracle would one day surpass Microsoft as the number one software company in the world, and Linux is obviously a part of that strategy. But what will come of this? Will Oracle ultimately take Red Hat over? By offering a better product at a lower price, will Oracle drive customers away from going to Red Hat for support - business that Red Hat depends on to survive?

Red Hat shares fell nearly 11 percent to $17.40 in extended trade from a Nasdaq close of $19.51 following Ellison's announcement. Oracle shares rose slightly to $18.71 in extended trade from a regular-session closing price of $18.62.

User Comments: 2

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Phantasm66 said:
te]Imagine you're the boss of a company which has over the past few years built a reputation as a leader in its field of the supply and maintenance of enterprise Linux systems. Suddenly in one fell swoop, a powerful and much larger company moves in and undercuts your prices by 50%, offering exactly the same products and services, with arguably a better level of support. What do you do?The short answer is nothing. Not because you don't want to respond but because you can't respond.We are of course talking about Red Hat and Oracle. Red Hat makes its money by supporting its open source Linux distribution for enterprise customers. Now business software giant Oracle is going to market with Red Hat Linux support, offering the same services at half the price. Where are budget conscious enterprise customers going to go?The market answered that question after hours by savaging Red Hat shares. Basically, Oracle has usurped Red Hat's business and there's not a thing that Red Hat can do because the nature of open source and Linux makes the software freely available. Provided that you have the people and the infrastructure to support that software - and Oracle has - you can simply go to market with the same offering.In the case of a powerful company like Oracle, you can afford to drastically undercut a much smaller rival like Red Hat and offer a wider range of services to boot.The problem for Red Hat is that the open source model upon which it has built its business is not about selling proprietary software. It's about supporting freely available software. The only barrier to entry is people with expertise - and Oracle already has those.Oracle CEO Larry Ellison was correct when he indicated back in April that Red Hat was too expensive to buy. In fact, as analysts have pointed out, any price is too expensive for Oracle because it doesn't need to buy Red Hat. Oracle has already entered the Red Hat business without spending a penny.The same thing holds true of any company that builds a business based on open source software. The business will always be about people and, unlike intellectual property, people can be easily bought.[/quote]
Phantasm66 said:
Actually, this might turn out to be one of the best things that has ever happened to Linux.Maybe what it needs is to be unified into a single OS, and Oracle has the might to do that. Red Hat is (IMHO) by far the best distro and an ideal one to base an Oracle Linux on. Linux is still GPL so it would still be available without a charge in the way it is now, only Oracle would be behind it, developing it and making it even better.
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