Oracle Drops the Bomb on Red Hat

Posted by: Steve Hamm on October 25, 2006

Red Hat’s stock took a pounding earlier this year when Oracle CEO Larry Ellison suggested that he might buy a Linux company and compete with the No. 1 Linux distributor. He didn’t do that. But now he has done something even more devilish. Oracle announced today that it will take Red Hat’s version of Linux, strip off all of Red Hat’s trademarks, and sell it to customers for a big discount off of what Red Hat charges. It’s a ruthless and brilliant act of capitalism.

Here's the Oracle press release

Oracle Announces The Same Enterprise Class Support For Linux

As For Its Database

ORACLE OPENWORLD, SAN FRANCISCO, Oct. 25, 2006 – Today Oracle announced that it would provide the same enterprise class support for Linux as it provides for its database, middleware and applications products. Oracle starts with Red Hat Linux, removes Red Hat trademarks, and then adds Linux bug fixes.

Currently, Red Hat only provides bug fixes for the latest version of its software. This often requires customers to upgrade to a new version of Linux software to get a bug fixed. Oracle’s new Unbreakable Linux program will provide bug fixes to future, current, and back releases of Linux. In other words, Oracle will provide the same level of enterprise support for Linux as is available for other operating systems.

Oracle is offering its Unbreakable Linux program for substantially less than Red Hat currently charges for its best support. “We believe that better support and lower support prices will speed the adoption of Linux, and we are working closely with our partners to make that happen,” said Oracle CEO Larry Ellison. “Intel is a development partner. Dell and HP are resellers and support partners. Many others are signed up to help us move Linux up to mission critical status in the data center.”

“Oracle’s Unbreakable Linux program is available to all Linux users for as low as $99 per system per year,” said Oracle President Charles Phillips. “You do not have to be a user of Oracle software to qualify. This is all about broadening the success of Linux. To get Oracle support for Red Hat Linux all you have to do is point your Red Hat server to the Oracle network. The switch takes less than a minute.”

“We think it’s important not to fragment the market,” said Oracle’s Chief Corporate Architect Edward Screven. “We will maintain compatibility with Red Hat Linux. Every time Red Hat distributes a new version we will resynchronize with their code. All we add are bug fixes, which are immediately available to Red Hat and the rest of the community. We have years of Linux engineering experience. Several Oracle employees are Linux mainline maintainers.”

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Reader Comments

Jack

October 25, 2006 11:47 PM

Oracle is a large company, but the reality is larger companies have tried this before. They all failed.

If anyone is familiar with the Oracle mantra: "it only costs X, Oh well now you have spent X you might as well keep spending", it might be well advised to really think about this "half" price approach. Sure they might charge half at first, but then as they continually extend the problem the price will keep going up.

This is part of the reason that other attempts by large commercial vendors have never had the adoption rate, and by lacking the adoption rate losing the inherent benefit of Linux... the community.

The company itself is nothing without the backing of the millions of eyeballs that qa, document, and create new code. This community wants as little to do as possible with large commercial vendors because they threaten the very principles of the business.

Honestly, if Oracle is dedicated to Open Source... Open Source the Oracle applications and Database. Until they do that, they are proving they don't get Open Source, and can't be a responsible vendor. By not being a responsible vendor Enterprise customers should beware, as the price tag can be jacked at any time.

Last, this is an interesting move as far as the community goes. Red Hat has given a great deal to the community over the years. Outright attacking them might make them push database products, which from what I have seen in implemented Enterprise solutions... are more robust, and more scalable than Oracle apps.

p.s. html markup in the comments doesn't appear to work as it should.

John

October 26, 2006 04:29 AM

Ruthless, yes; brilliant, no. If the only brilliance you show is to steal the work of others, debrand it, and re-sell it, that's not exactly brilliant.

Karsten Malle

October 27, 2006 03:57 AM

Jack said:
"Oracle is a large company, but the reality is larger companies have tried this before. They all failed."

Jack, Which companies larger than Oracle have tried this strategy before?

Bob

November 22, 2006 06:16 PM

"If the only brilliance you show is to steal the work of others, debrand it, and re-sell it, that's not exactly brilliant."

Um, isn't that what RHat is largely doing? LOL, it's funny how you OSS zealots get upset when the actual openness of that open source gets tested. I think it was both ruthless and smart. Go Larry.

steve

March 23, 2007 11:40 AM

Euhm ... what IT company is larger than Oracle? :)

I also think you OSS are not getting the point either. It's open source, it's free... every linux distro is "taking" the source and doing something with it, redhat too ... so what's wrong with that?

and indeed... go larry ;)

karl

February 20, 2008 08:13 AM

I am just studying Open Sourcing. One of the principles for open sourcing, the way I understand it, is once a company gets involved with open sourcing of the code, that company agrees to keep all that information at the same open source level.
To call Oracle brilliant by breaking them apart is like praising a gangster for his tactics.

Thank you, as I continue to learn and commend the open source people for, at least, attempting to improve the internet world by allowing people to constantly upgrade for our common good.

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