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.
'Unfakeable Linux,' Red Hat Promises
Red Hat is trying to fire back with its own bravado, sporting a huge banner on its Web site (in Oracle red, no less) reading "Unfakeable Linux" to tweak Oracle's "Unbreakable " Linux marketing campaign. In its online Q&A, Red Hat said Oracle's plans to make changes to the Linux code would invalidate Red Hat's hardware and software compatibility certifications and that it couldn't guarantee compatibility with Red Hat Enterprise Linux. It also noted that Oracle isn't supporting other Red Hat products, such as its Application Stack, Cluster Suite, and Directory Server.

Billy Marshall, CEO of rPath, which sells Red Hat Linux configured for particular application bundles, predicted Oracle's move will strain Red Hat, but not for long, just as Novell's entry into the enterprise Linux market had only a short-term effect on Red Hat's fortunes. Marshall, who was VP of North American sales during Red Hat's 2001-2005 growth spurt, doesn't buy Ellison's assertion that slow bug fixes are slowing Linux adoption. "Oracle has determined to use Linux as a competitive weapon to reach their own goals -- to own as much of the software market as possible," he says. Whether open source wins or loses is secondary, he says.

Watch For The Fork
Problems with multiple Linux kernels

Apps may run differently
on each

Once-unified user market splinters

Developer pool gets diluted

Beyond Linux, Oracle also still might covet JBoss for its broad base of application server and Java middleware customers. Oracle has cited in earnings reports its fast-growing applications revenue as proof that the company isn't dependent for growth on the mature database market. But it has acknowledged that for its applications to win wide acceptance, it must become a strong player in middleware, currently dominated by IBM WebSphere, BEA WebLogic, and Sun Microsystems Enterprise Java System.

More Than Linux On Display
Ellison stole the show with his Linux plans, but the company also had some bread-and-butter announcements about the database, applications, and middleware that were the reason tens of thousands of people came to San Francisco.

Oracle previewed the release of its E-Business Suite 12 applications, though they're at least a year from availability. E-Business Suite 12 will let companies do profitability analysis and reporting on their products, channels, market segments, and individual customers. The suite will also include tools for evaluating the cost and revenue effect of supply chain decisions and a feature for evaluating global projects. Enterprise search, XML-based reporting, and role-based analytics are improvements common to many of the upgrades under development. "Search is becoming one of the new metaphors for how people navigate to their work," said John Wookey, senior VP of applications. Wookey says the first applications under Fusion -- the application suite that will combine Oracle's apps with the PeopleSoft and Siebel apps it has acquired -- are still scheduled to be available next year, and that the complete suite will be available in 2008.

Oracle also blasted out a list of planned improvements in its upcoming Oracle 11g database, including online application upgrades, snapshot standby, and flashback archiving. Oracle also added a user interface component called WebCenter Suite to its Fusion middleware, which is meant to become the default user environment for its Fusion applications. With the present generation, it can be invoked to perform search, business intelligence, reporting, and other tasks across Oracle apps and a variety of structured and unstructured content sources, such as Web portals, e-mail, and databases.

None of that news could outshine Ellison's Linux plans, though. The stock market at first glance didn't like Red Hat's chances against Oracle. Now it's customers' turn to respond.

-- With Rick Whiting and Barb Darrow