The Linux World Learns How Larry Ellison Does Business
In his bold play for Red Hat Linux customers, the Oracle CEO shows how important the operating system is to his company.
Oracle CEO Larry Ellison is determined to shape Linux's future, and he's not waiting for someone to ask his opinion.
In a sign of the central role of Linux in Oracle's future, Ellison said this week that Oracle will strip the Red Hat trademarks and symbols out of Red Hat Linux and market that version as the best Linux on which to run the Oracle database. And it will back it with low-cost support.
There was wide speculation that Oracle might issue its own Linux distribution. Rumors swirled among the 42,000 attendees of Oracle OpenWorld this week in San Francisco that it would designate the easy-to-use Ubuntu version as its preferred Linux, bundled with the Oracle database.
Would he look good in a red fedora?
Ubuntu fans will have to wait. Instead, Oracle zeroed in on the Linux that dominates business servers (Red Hat commanded 61% of the paid Linux market last year) and promised that Oracle's version of Red Hat's product would be better than Red Hat's. Oracle will offer customers its own bug fixes to the Linux kernel as it has them, rather than incorporating the fixes into the next release of the kernel. And Oracle is claiming that its 24-by-7 worldwide technical support will cost less than half the price of Red Hat's.
Did the world take Ellison seriously? Red Hat's stock plunged 24% the next day. "At the price they're going to support it, I would say, yes, we'll consider it," says Ampie Kruger, manager of business systems for Mweb, a South African Web hosting service, who attended Oracle OpenWorld. Mweb runs the Oracle database on six four-way servers running Red Hat Linux and gets its technical support from Red Hat.
Faster Fixes, Ellison Says
Ellison cited faster bug fixes as the rationale for moving to Oracle's Linux. The wait for bug fixes "is the most serious problem confronting the Linux community today. It's slowing the adoption of Linux," he said in his keynote speech.
But the open source community doesn't see Ellison as a white knight. "The downside is lock-in if Oracle manages to eliminate Red Hat as a viable competitor -- which I have no doubt is their long-term intention," says Venona, in a post to the open source blog Slashdot. "I would hate to see Red Hat being subsumed by Oracle."
It's conceivable. Oracle could make a bid for Red Hat, especially if its stock price stays at this week's level. Red Hat's market cap was about $3 billion at the end of this week; Oracle paid $10.3 billion for PeopleSoft and $5.8 billion for Siebel. Oracle had its eye on JBoss, the popular open source Java application server and middleware company, until Red Hat acquired it. "If they get the Red Hat stock price down, if Red Hat is seen as floundering, they might acquire the team or the company," says David Woodard, a consultant at House of Brick Technologies, which installs Linux for retailers and banks. Most of his customers run Oracle under Red Hat Linux, and he'll recommend they consider Oracle's offering.
Getting database and Linux support from the same company appeals to Kamran Rassouli, a database analyst at Activant Solutions, which makes software for lumber stores, hardware stores, and auto parts retailers. His firm runs Linux and Solaris, with the Oracle databases under Solaris. The upside: "You don't have to prove whether it's a database or operating system problem," Rassouli says.
Oracle has Linux talent. It contributed to the Linux community a cluster file system that was accepted by lead developer Linus Torvalds and became part of the kernel. It employs as VP of Linux engineering Wim Coekaerts, one of the first developers to illustrate the possibility of running applications on Linux clusters. "We will give you the same support for Linux as for the database," Ellison said.
But bug fixes from Oracle prompted talk of something the Linux community dreads: a fork. If Oracle distributes bug fixes on its own schedule, rather than waiting to add it to the kernel, that creates a fork, where an application running under Oracle Linux wouldn't be guaranteed to run under the next release of Red Hat Linux. If Red Hat came up with a different fix for the bug or declined to incorporate the fix because of risks to other parts of the operating system, customers would have to choose between the two. That's different from today's choice between Novell Suse Linux and Red Hat, which use the same kernel. And it raises the specter of the kind of fragmentation that occurred among Unix vendors in the late 1980s and ultimately hindered the adoption of Unix.
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