October 25, 2006 2:59 PM PDT

Oracle to offer Red Hat Linux support

SAN FRANCISCO--Oracle will sell support to Red Hat Linux customers and offer its own free clone of the open-source operating system, posing a major competitive challenge to the leading Linux seller.

"As of this moment, Oracle is announcing full support for Red Hat Linux," Chief Executive Larry Ellison told thousands of attendees at the Oracle OpenWorld conference here on Wednesday. "If you are a Red Hat support customer, you can very easily switch from Red Hat support to Oracle support."

Larry Ellison

Becoming an operating-system company is one of a series of bold attempts at growth by the Redwood Shores, Calif.-based software company, which in recent years also has acquired small and large rivals. Many major computing companies have embraced Linux, but until now, all have chosen partnerships with Linux companies rather than direct competition.

Ellison argued that customers of Unbreakable Linux 2.0 will enjoy lower costs, better bug fixes and better legal protections than with Red Hat. Software updates cost $99 per server, while technical support costs $399 for a two-processor server and $999 per year for a larger system, Ellison said. And unlike Red Hat, Oracle will let anyone download the software for free.

"We will backport your bug fixes" to earlier Linux versions, he said. "We will indemnify you from intellectual property problems. And our support costs way less than half of what Red Hat charges," Ellison said.

Red Hat trimmed?
In after-hours trading, Red Hat's stock plunged 16 percent, or $3.16, to $19.51, but CEO Matthew Szulik was unfazed by Oracle's move. He said the Linux seller isn't re-evaluating its pricing, its relationship with Oracle, its plans to expand its open-source products higher up the software "stack," or its relationship with Oracle rivals.

Over the last four quarters, 99 out of 100 enterprise accounts that were up for renewal did renew, and greater than 40 percent expanded their Red Hat Enterprise Linux penetration. "Clearly, we must be doing something right," Szulik said of the company's support subscriptions. Of the lower stock price, he said, "Sounds like a buy."

But because Oracle is Red Hat's largest software partner, its Linux move could seriously encroach on Red Hat's customer base, said Jefferies & Co. analyst Katherine Egbert. "They're very influential in selling Red Hat Enterprise Linux. We don't know how Red Hat is going to respond yet, but given this, why would you go to Red Hat?"

Outside Oracle's customer base, the effect on Red Hat likely will be limited, predicted Raven Zachary, an analyst with the 451 Group. "I don't see non-Oracle database or applications customers selecting Oracle as its Linux provider any time soon," he said.

Oracle, like the CentOS project, wants to clone Red Hat's Linux based on the source code produced by the company, not create a new Linux variant. And Ellison promised that software certified for Red Hat's Linux will still work.

"If your application runs on Red Hat today, that application will run unchanged when you're getting Oracle support," Ellison said. "It's very important not to fragment the Linux market. Every time Red Hat comes out with a new version, we're going to sync our version with that version. All we add is bug fixes."

Oracle will sell support to any Red Hat Linux customer, not just customers of Oracle products, Ellison said.

CONTINUED: Oracle and open source…
Page 1 | 2

See more CNET content tagged:
Red Hat Inc., Larry Ellison, Oracle Corp., Red Hat Linux, Linux seller

17 comments

Join the conversation!
Add your comment
interesting business plan
Copy RedHat's product and steal their customers.

So, what happens when RedHat goes out of business?

Will Oracle be able to update the OS on their own?

Is Microsoft behind this just like they have been behind SCO?
Posted by hedred (20 comments )
Reply Link Flag
That's a little paranoid.
They are copying RedHat's product, more or less,
but I don't think they do it at the expense of
RedHat. Remember that RedHat is far from the
only vendor offering Linux support, contributing
patches and development, etc. They aren't even
the biggest company doing so -- just ask IBM.

It'll be interesting to see how Oracle does
because just about every product they have
outside their core database is second-rate (to
be polite). I'm not sure that they have the
resources or commitment to do a better job than
RedHat or manage updates and fixes in a sane
manner. It also goes without saying that
back-ports and bug-fixes will also be
open-source, so Oracle has no particular
advantage there. The claim that one need to
replace the OS to get bug-fixes for many
products is also weak as it's not true, and
Oracle plans only to offer backports for an
extra 6 months (and, as RedHat critics
point-out, back-ports are one of the worst
things about the RedHat distribution).

I don't think MS is behind this at all. As a
matter of fact, Ellison's initial comments on
taking up a Linux mantle expressed his disgust
with Microsoft and his personal view that it's
in Oracle's best interest for the OS to become a
commodity that Oracle can provide and support to
its own liking.
Posted by Zymurgist (397 comments )
Link Flag
Not a smart move
I admin few Linux servers at several locations.

For development and testing servers, everyone likes to play with CentOS: it's a RedHat without the trademark and symbols, but fully compatible with Redhat offering. RedHat doesn't have any problems with it actually.

When it comes to production servers, Everyone either buys a RedHat license. RedHat has actually some good pricing, depends on the numbers of server you're running with their OS.

So what Oracle offer is? to give me their "support"? yeah, I've seen their so-called "support" with RAC and a Linux server that kept crashing. If I want the latest patches without paying to RedHat for the support contract, I can easily takes CentOS updates and put them on the RedHat server.

RedHat, With 90% returning customers for their support offerring, has clearly withstanded competitions from wide free and/or commercial "competitors" - be it Novell/SuSE, CentOS, Sun (which gave up pretty fast), and tons of others. RedHat customers kept coming back to renew their contract year after year.

Good Luck Oracle, you're giving me an offer of 50% off the price, but you don't have any Linux distribution experience compared to what RedHat had till today (since 1993) and I preffer to pay a bit more, but at least I have support from the same guys who gave me the OS.

Hetz
Posted by hetzbh (43 comments )
Reply Link Flag
Not a big issue, but a bad precedent
Oracle will not likely undermine Red Hat's support business (their only solid revenue source). Oracle is a big company, has big R&D costs and is not a company well reputed for giving good support or doing solid software.
But the fact that Oracle does it shows that RHAT and other Linux distributors have been living in a dream. Their business model is "develop software, give it away and live off support". But there's nothing preventing another company from establishing a slightly more interesting business model: "NOT develop software, take what's already out there, give it away, live off cheaper support". Nothing bad with that, but then the companies investing in developing Linux will have a cost center with nothing to show for it. Why would any serious company spend money on something that gives zero $ in return? Net result: corporate Linux development is stalled, and only development comes from individuals and nonprofit organizations. Not the death of Linux, but certainly a bad sign.
And the crazy thing is that this was evident from day zero. But some tried to look the other way, especially investors trying to look into some innovative business models.
Now it's time for a reality check. And RHAT stock is just beginning to show the consequence of that reality.
Posted by herby67 (144 comments )
Reply Link Flag
I don't agree.
RedHat is a service company. What little
software development they do do, they do as part
of their service. Sure, you can download GFS,
for example, but if you want GFS to have feature
X, who do you call? If you want to plan a
deployment based on it?

The difference here is that the OS is no longer
the product, it's a commodity. Like corn, anyone
that wants to can grow it and sell it. But ADM
takes that same corn and delivers lots of it, in
various pre-processed forms and will negotiate
for delivery, grade, form, work on setting up
supply chain and storage, etc. Same with RedHat.
They could still forgo development outright and
the product would still grow and evolve, bugs
will get fixed, etc. When they pour money into
development it's to steer the evolution towards
something they can market services around and to
give something back to the community (who turns
around and improves their product).

CentOS is a good example of RedHat without the
cost. No support (well, maybe a little now and
then), and no development overhead, save for the
actual process of building the packages. They
sell the same commodity but without the services
on top and make a small amount on a nominal
charge for the media and labor in its
preparation.
Posted by Zymurgist (397 comments )
Link Flag
It will be interesting
So Oracle is going to support Red Hat and make bug-fizes and backports? Great, so Red Hat doesn't have to do it anymore because changes, if I am reading the GPL correctly, have to be submitted to the upstream vendor (RedHat).
Posted by dragonbite (452 comments )
Reply Link Flag
Red Hat can fight back
If Ellison wants a fight, give it to him. Red Hat should announce from now on it will only support open source data bases and not support Oracle. Ellison will be left no Linux strategy and scrambling to save his database business
Posted by snoofy (7 comments )
Reply Link Flag
Better way to fight back
Go ahead and let Ellison start support for Red Hat Linux. Then Red Hat pulls the plug on supporting Oracle about a year after he gets started. Even the possibility that Red Hat might to this shows the foolish of Ellison's strategy. Ellison should rethink his Linux strategy and come up with a better plan.
Posted by snoofy (7 comments )
Reply Link Flag
Hurray to Open Source
A good lesson for anyone who invests in open source company. Don't get me wrong, I hate Oracle as much as many others, quite easily one of the most hypocritical company one earth. But Red Hat is at a serious disadvantage, Oracles core business is not open source, it has nothing to fear. Open source offerings like MySQL are far behind, but for Oracle to offer a Red Hat clone would be a piece of cake.
Posted by FutureGuy (742 comments )
Reply Link Flag
Switching is not an option for everyone
I'm sure SAP will not certify against "Unbreakable Linux" as it has done for RedHat and SuSE.

- rmjb
Posted by rmjb (28 comments )
Reply Link Flag
It change nothing, because UL == RedHat
No one really bother about it - it will work on UL because it is the same redHat with a few patches. And then, if demand exist, they will certify.
Posted by alexei_roudnev (29 comments )
Link Flag
More linux fragmentation now
Poor ISVs who have to certify their apps on all these flavors of linux.

ajay
<a class="jive-link-external" href="http://www.innerdep.com" target="_newWindow">http://www.innerdep.com</a>
Posted by dfmrrd (10 comments )
Reply Link Flag
Nah
Oracle's Linux offering is just RedHat. They ostensibly plan to offer bug-fixes earlier than RedHat does, and support for a longer period of tim for older versions (pesumably of the kernel), but that's it. Oracle and RedHat will be the same thing (like RedHat and CentOS), just the branding is different.

As far as ISVs are concerned, there's no need for certification fr most versions of Linux, and if they follow some simple best practices, they can be assured they're products will work with any flavor. At worst, they need to aim for perhaps 3 major flavors, all of which more alike than the two XPs, 2 W2Ks, W2K3, and 7 Vistas.
Posted by Zymurgist (397 comments )
Link Flag
Oracle claim of Linux support is a total Hoax - pure false Advertising
This Advertising by Oracle that they are offering support for Linux for $99 and for so called enterprise Linux for $399 per server is a total lie. A pure false Advertising.

Call Oracle, the number they gave on this Ad which ran in such places ad WSJ and you will see what I mean. I called them, after 3 attempts I finally got to a person who:
1- Did not know what version of Linuix Oracle was
supporting. Imagine something as elementary as which version of Linux are you supporting he could not reply to.
2- Did not know what the support entailed. Can you imagine that!
3- Asked him if support means whether they would remotely access our server and fix our Linux installation he replied they have no means of remotely accessing servers!
Free Winscp would do it.

etc. At the end he said that they really do not know anything, not much, but anything about this offering of support for Linux by Oracle!!!

This is one more Hoax coming out of Silicon Valley. Certainly not on par of Google buying UTube for $1.6Bill Hoax, which was purely one
hand of Sequoia venture selling to the other hand to jack up the price of Google so they
could dump Google shares on public, but still pretty big Hoax.

P.S., Oracle provides support of Oracle DB at about $50K per year per server, starting.
So if they charge $50,000+ per year for Oracle DB Support, how the HEK are they going
to provide Linux support for $399 per year.
Posted by caudio_roma (57 comments )
Reply Link Flag
КувHmm, who said that Redhat support Oracle?
Interesting, why did you decided that Redhat support Oarcle? Do they have orarun package, which runs Oracle? DO they maintain oracle documentation and Oracle forums?

I can understand, if someone say _Novell support Oracle_ (very poor support, but it exists), but redHat.. hmm, it is not a support, it is fiction (mainly).

One of the reasons of Oarcle's move is _they are tired of fragmentation_. In reality,e ach next release means _compatibility problems_, _libraries removed_, _new features are not compatible_ (tlb support), async io bugs and so on... On the other hand, Oracle don't need 99% of Linux features which are introduced with the new versions (it dont have any benefits not from RHEL5 not from SLES10, except online ext3 resize on SLES and XEN on RHEL5).

On the other hand, they have thibgs to integrate:
- Linux
- SAN drivers
- Oracle RAC
- ASM
- OCFSv2
- heartbeat
- Cluster volume manager
- Oracle start/stop/ management scripts for oracle itself.

For now, only Novell integrate some of this things (without big success, but at least somehow), including (for example) heartbeat2 + evms + ocfsv2 integration.

So, let's see how it all works together.
Posted by alexei_roudnev (29 comments )
Reply Link Flag
Larry goes after Bill again
This is Larry's latest attempt to topple Bill/Microsoft from the number 1 position. I actually think that Larry and Oracle can help propell Linux further into the mainstream that it is now.
Posted by ricecomputersolutions (3 comments )
Reply Link Flag
Larry goes after Bill again
This is Larry's latest attempt to topple Bill/Microsoft from the number 1 position. I actually think that Larry and Oracle can help propell Linux further into the mainstream that it is now.
Posted by ricecomputersolutions (3 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.