Oracle: If RHEL were free, we wouldn't compete

In the midst of an otherwise insightful analysis of Oracle's contributions to the Linux kernel (spoiler: they're significant), Wim Coekaerts, Oracle's vice president of Linux engineering, makes this baffling statement:

We're offering (Oracle Unbreakable Linux) only because Red Hat requires customers to pay for binary downloads of (Red Hat Enterprise Linux). If RHEL was free, we would have never done (Oracle Unbreakable Linux).

Let me get this straight. If Red Hat would just give away its product for free (as in price, source code, etc.), Oracle would be happy to not try to compete with Red Hat? Is that generosity, or what?

I'm sure that others would like to sign up Oracle to this plan. Maybe IBM and Sun Microsystems could simply abandon their database development if Oracle will simply give away its database for free.

Deal?

Oracle is a great company that has made significant contributions to the Linux kernel. That is not in question. But the company's motivations for trying (unsuccessfully) to undermine Red Hat in the Linux market are far from clear.

First, Oracle says it is getting into Linux because Red Hat, which CIOs rate dramatically higher than Oracle each year, can't offer high-quality support the way Oracle does, only to discover that Oracle's Linux support pales in comparison to Red Hat's.

Now we find out that it's not a question of support at all, but rather that Oracle simply wants Linux to be free. Why? Because that makes its overpriced software seem cheaper.

At least Oracle is being honest now. Coekaerts' argument is cheeky, but it makes strategic sense for Oracle. It just makes no financial sense for Red Hat.

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[morgan_greywolf]

If Oracle wants there to be free Red Hat Enterprise Linux for their customers, they could simply point them at CentOS or Fedora Core. CentOS is pretty much built by taking all SRPMs for RHEL and building binary RPMs out of them. I'm still not buying their argument.

[FellowConspirator]

I concur. RedHat offers the sources, and CentOS downloads them and build from the RedHat sources and puts them on the site. CentOS is a drop-in replacement for RedHat in every way save for the phone support.

Fedora does deviate from RedHat slightly, but CentOS is identical and no-cost. Actually, Oracle's Linux is notably more different than CentOS.

[rklrkl]

Oracle Unbreakable Linux seems to be a completely pointless exercise. It sits in a very uneasy no-man's land between the pricey RHEL and the totally free CentOS clone. It offers neither of the two main pluses of the other two, namely the support (or indeed R&D) of Red Hat nor the crazily cheap (read: zero) cost of CentOS.

It should be noted here that both Oracle and Red Hat are guilty of overcharging their main products by insisting that support and updates are bundled together into one very high cost annual fee. Oracle used to charge only 6% for updates and something like 15% for support for each year of renewed licences, but when a lot of customers started paying for updates only, they scrapped that and now rake in a quite extortionate annual free at something around the 22% level of the original [very high] purchase price.

I personally think that to combat Oracle's Unbreakable Linux, Red Hat should actually revert to Oracle's old model of splitting the updates vs. the support (and maybe throw in a discount if you buy both together). This would instantly kill Oracle's Linux, but it could impact their revenue (difficult to be sure - for those who switch from updates+support to just updates, there could be an equal or greater influx of new customers buying updates only).

[kojacked]

Hey I thought open source products were all supposed to be no cost?!?!? My company is thinking of going all open source because they read on the internet that it was free. I guess we'll stick with Microsoft. No thanks Red Hat.

[storm14k]

If the people running your company are this simple you'll be out of business soon anyway open source or not.

[rklrkl]

kojacked, you clearly didn't read any of the comments prior to yours - CentOS is available as a totally free clone of Red Hat. It can only do this because the licenses of the software in RHEL insist that the source code must be made available and hence CentOS can construct a near-exact copy (minus trademarked items such as Red Hat's names and logos) and release it for free.

Red Hat make their money on providing an updates+support package for customers, but there's nothing to stop someone installing CentOS on most of their machines for free and then only buying RHEL on the most "critical" machines. I wouldn't be surprised if this mix wasn't fairly common out there, especially since RHEL is certainly not a cheap OS.

[robosaturn]

"Hey I thought open source products were all supposed to be no cost?!?!?"

Two points.
1) The "free" in "Free Software" is in respect to "freedom", not cost.
2) Red Hat does give away their source code, as required. ftp://ftp.redhat.com/pub/redhat/linux/enterprise/

Your point was what again?

[t8]

Red Hat made a mistake for not being free. Yeah right!

[David Gerard]

There's an easy way for Oracle to make Red Hat zero-cost:

Certify CentOS.

The only reason anyone buys a Red Hat license is because software requires certification.

So the question to ask Oracle is: "Why don't you certify CentOS, then?"

[richard993]

It's not about making Redhat free... there are dozens of well known Linux distributions out there that are free. It's all about corporate greed: diversifying investments, increasing profit margins, getting bigger, stealing customers from competitors, etc... etc... In this case, a partnership makes much more sense. Many large corporations such as Oracle, Microsoft, IBM, and others are spreading themselves thin by diversifying in areas where they don't excel, and furthermore, trying to leverage their existing monopoly through vendor lock-in. There are plenty of other strategies out there that Oracle can take, trying to compete with Redhat should not have been one of them.

[idfubar]

I'm surprised no one mentioned the fact that Oracle's original OS partner was Sun (a la Solaris)... why no full-circle movement back to OpenSolaris?