When Oracle decided to fork Red Hat Enterprise Linux, it did so under the banner of offering improved support and lower costs for its customers. Oracle Enterprise Linux has failed to set the world on fire, perhaps in part, as Gartner highlights in a new research report ("Red Hat vs. Oracle Linux Support: When and How Does It Matter?"), because its cost and support advantages appear to be overstated.
Oracle Enterprise Linux
(Credit: Oracle)It's hard to compete on supporting code when you write and influence much less of it.
But Oracle can charge less, right? Yes, it can. Gartner reports: "Some 90 percent of users that have gotten a price quote on Linux from Oracle claim that Oracle has lower support fees due to aggressive discounts, with most users saying the fees are 50 percent below Red Hat."
A 50 percent discount sounds great, right?
Maybe. That discount comes at a significant cost, for several reasons that Gartner points out:
- Although Oracle claims that it maintains lockstep on RHEL [Red Hat Enterprise Linux] code, and applications need not be separately certified to Oracle if certified for RHEL, in reality, users bear some risk to assure quality of service. [Translation: Oracle Enterprise Linux (OEL) customers have to invest extra budget to ensure their applications will run seamlessly on OEL.]
- OEL begins with the source code of a RHEL version as its base....However, if a priority fix is required for a problem in RHEL code in a complex configuration, then there is the potential for temporary forking....Thus, Oracle users are likely to have a different patch from a Red Hat-supported configuration, at least temporarily....Of course, users need to go through regression testing to make sure that the temporary fix has not created potential problems. This puts Oracle in the position of quickly reacting to problems of severe priority; however, users must monitor the fixes closely. [Translation: OEL customers must do regression testing and closely monitor OEL fixes to ensure they'll work.]
- Users with RHEL contracts will face significant challenges in reducing support costs by selecting specific Red Hat-supported servers and not others. [Translation: Because of Red Hat's pricing/contractual terms, it becomes difficult to mix-and-match support for some servers while not for others, so it may be hard to find cost savings this way.]
According to Gartner, it is this last item that may be driving the most interest in OEL, because Oracle doesn't adopt Red Hat's "all-or-none" approach to Linux server support. Even so, Gartner only finds 20 percent of Red Hat customers surveyed are annoyed by its contract policies. That's a significant number, but not overwhelming.
Given Oracle's aggressive discounts, including its willingness to buy out the remainder of a customer's Red Hat contract, as Gartner reports, one would think that it would be flying high. But it's not. OEL has roughly 2 percent market share, compared to Red Hat's 60 percent market share. Enterprises aren't stupid: if Oracle's Linux story were compelling, they'd be buying. But they're clearly not.
Not that Red Hat is in the clear. Its biggest weakness against Oracle and others is that Oracle can sell a much more complete story to the CIO. Red Hat, to the extent that it talks to the CIO at all, is a tactical decision. It's an important tactical decision, but big contracts are awarded to companies like SAP that promise dramatic competitive differentiation through optimized business processes.
The best Red Hat can do is improve performance and lower costs on server infrastructure. This isn't insignificant, but it's not something that gives Red Hat an impregnable hold on a CIO's attention and wallet. While I've only seen one defection to OEL in the past two years within Alfresco's customer base, I have seen an increasing number shifting to alternatives like CentOS.
In sum, while Oracle's Linux play isn't yet serious competition to Red Hat, it does establish just how limited Red Hat's position is.
Follow me on Twitter @mjasay.
Oracle has gone on a buying spree in the past few years, consolidating an impressive portfolio of market-leading technology. But there's one thing it still lacks, despite awkward efforts to fill the void: an operating system. Though Oracle has unsuccessfully courted Red Hat as an acquisition target for years, its affections might be better placed on Ubuntu.
Yes, by acquiring Sun, Oracle is gaining Solaris, but as Red Hat CEO Jim Whitehurst indicated in the Red Hat earnings call on Wednesday, the exodus of Solaris-to-Linux users continues apace, as Sun's attempt to neutralize Linux's appeal with OpenSolaris have had zero effect on stopping the exodus.
Oracle Enterprise Linux (OEL), a Red Hat Enterprise Linux (RHEL) clone, has failed to dent Red Hat's dominance, with Red Hat renewing all of its top 25 deals (again, and at 120 percent of renewal value) that were up for renewal, losing none to OEL. As such, RHEL's dominance remains a festering sore for Oracle's ambition to own a complete enterprise software stack. So long as Red Hat owns the foundation of that stack, it remains a real threat to Oracle.
So long as it's easier for Oracle's sales force to sell Oracle applications and databases on RHEL than on OEL, OEL will continue to bluster but fail.
Oracle could buy Red Hat, but with Red Hat earnings consistently strong, Red Hat is arguably too pricey to be a viable takeover target, as The Register opines. Besides, Red Hat has shown no desire to jump into the arms of its Redwood Shores business partner and competitor.
All of which makes me think that a strong partnership with Canonical for Ubuntu, rather than continuing to feed Red Hat, could be the right Linux strategy for Oracle.
Ubuntu is the clear community choice in Linux distributions, dominating Linux "desktop" adoption and also claiming a solid foothold on enterprise servers. Unlike OEL or Novell's Suse, Ubuntu comes with built-in enterprise momentum, albeit still at the grassroots level. Oracle's sales force could sell Ubuntu as a complement to Oracle technology, unlike OEL which is a difficult sales pitch.
The spirit to sell OEL is willing, but the flesh is weak.
As just one data point on this enterprise readiness to accept Ubuntu, my company, Alfresco, an open-source content management vendor, has seen adoption of Ubuntu rise to 37 percent of all trials of our Enterprise product, versus 28 percent for RHEL and Fedora.
A year ago, Ubuntu was making serious headway, but today the interest seems to be migrating to using Ubuntu for real enterprise deployments.
Other open-source companies I advise are seeing similar Ubuntu traction, a fact that is perhaps not lost on Dell and other hardware manufacturers that increasingly preload Ubuntu on their servers, Netbooks, and laptops.
Ubuntu, in short, has community momentum. What it lacks is the blessing of a major software vendor. Oracle, with its heft, is a kingmaker, and could give Ubuntu the "enterprise-ready" branding and certification that still elude it.
Not coincidentally, it was Oracle, more than any other company, that blessed Red Hat as the default enterprise Linux distribution years ago. But for Oracle's support for Red Hat Enterprise Linux, we'd almost certainly have a very different Linux market today, one where Novell's SUSE and other Linux distributions would have more respectable market shares compared to RHEL.
Oracle has the ability to make Ubuntu a mainstream enterprise server player. The question is whether it wants to.
As Matt Aslett, an analyst with The 451 Group, told me, "Oracle's Linux strategy is about serving its existing customers," and, given that there are more Oracle customers using RHEL than Ubuntu--coupled with the fact, as Sean Michael Kerner points out, that Oracle has yet to certify its products to run on Ubuntu--RHEL (and its clone OEL) may be seen as the safer course of action.
Even so, it remains unclear why Oracle should continue to plow resources into OEL when the market is voting for RHEL (paid enterprise adoption) and Ubuntu (unpaid community and paid OEM adoption). Either go back to a full embrace of RHEL or try Ubuntu.
Oracle could turn that Ubuntu popularity into paid deployments, while simultaneously asserting a greater measure of control over its operating system story. I'm a big fan of Red Hat's business, but I'm surprised Larry Machiavelli (er, Ellison) hasn't sought to check the ever-growing power of Red Hat in enterprise infrastructure.
What do you think? Would Ubuntu be a good move for Oracle, or is Linux such an afterthought for Oracle that the status quo with Red Hat is the right course of action?
Follow me on Twitter @mjasay.
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