Ellison's Red Hat hijacking maneuver

Ellison's Red Hat hijacking maneuver

Summary: I was talking to Goldman Sachs sage Rich Sherlund about Oracle's move to basically hijack Red Hat's Linux by rolling its own binary distro based on Red Hat and starting a support price war that Oracle can win. Rick said that "Larry is driving now," and didn't want to end up in a situation again where an operating system vendor was in control (Microsoft) of a growing software stack.

TOPICS: Open Source

I was talking to Goldman Sachs sage Rich Sherlund about Oracle's move to basically hijack Red Hat's Linux by rolling its own binary distro based on Red Hat and starting a support price war that Oracle can win. Rick said that "Larry is driving now," and didn't want to end up in a situation again where an operating system vendor was in control (Microsoft) of a growing software stack. It didn't help Ellison's mood that Red Hat bought JBoss.

Rick believes that Red Hat will run into the arms of open source MySQL, Ingres and others to confront the Oracle stack. Ellison said that his goal in create what is called Unbreakable Linux is to "enhance and speed the adoption of Linux and make it mission critical in the datacenter." There is truth in that statement, but it's also about ownership and dominance, which is somewhat antithetical in the open source world. Because Red Hat is truly open source in making its code available, there is nothing to prevent Oracle from taking the code, synching with it, erasing trademarks and rolling its own compatible distributions. 

That is the price of playing on the level playing field of open source, which is why many open source companies go commercial, throwing in a healthy dose of proprietary software to keep the wolves away. Ellison is baking an entire hybrid stack, from operating system and middleware to database and applications. As Ellison said during a Q&A following the announcement, "This is capitalism, we are competing....we are trying to offer a better product at a lower price." 

Matt Asay thinks that Oracle is making a code forking maneuver, despite protests from the company"

This, incidentally, is still the best reason for Red Hat customers to stay with Red Hat for support: Red Hat is doing more to innovate and develop the kernel than anyone else, including Oracle. Source of code matters more than source code in Linux, and Red Hat is the predominant source.

Oracle customers need to ask themselves if they want a forked version of Red Hat Linux. Like Red Hat or not, they have served a useful function of consolidating interest in Linux and thereby fostering commercial adoption of Linux. By providing non-standard kernel patches, Oracle is forking the kernel and setting themselves up to support the fork forever. 

It's possible that Oracle could do some forking, but it's not in the company's best interest, or customers' interest, to diverge from Red Hat open source code into Oracle open source code, at least now.

Watch the video of Ellison announcing Unbreakable Linux at OracleWorld 

The question is how Red Hat and Linus Torvalds and his minions will react to how Oracle behaves moving forward with its newfound aggression in the Linux space, and whether Oracle can actually deliver a superior support experience. We are still waiting to hear from Red Hat CEO Matthew Szulik to address Oracle's encroachment on his territory, which in the first hours has punished his stock. More to come...

See also:

Dave Dargo, formerly of Oracle, where he headed the company's Linux Program Office and defined it's Linux strategy, and now CTO of Ingres, which competes with Oracle's database, takes a whack at analyzing Ellison's latest move. He looks at Oracle's Red Hat support pricing in the context of paying fees to use Oracle's other products:

If the limiting factor of adopting Linux is the price of support, are we going to see Oracle lower their prices? Oh, that’s right—Linux is open-source and has a competitive support model and Oracle is closed-source with a monopolistic support model. That’s why they can charge nearly $200,000 for their database, with no options, for a four processor box. Monopolistic vs. competitive; which is better for the customer? 

Where are the support infrastructure networks for Oracle’s own products to automatically distribute fixes, patches and alerts? It’s amazing that they can provide all that for a mere $399 for a competitor’s products, but not for their own $200,000 product. 

Topic: Open Source

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  • This will all blow over pretty fast as people realize that Oracle can not

    instantly get the open source credibitlity and trust that RedHat has, and that they can not instantly do as good of a job as RedHat on support. And, people also fail to understand how Oracle throwing its weight behind RedHats version will help in bug fixing and features, making RedHat an even better OS. In the end, it will be a bigger pie for everbody. A rising tide floats all boats.

    Having more people using RedHats version is good for RedHat, even if they don't make money on the clones (now including the Oracle clone).

    Also, improvements that Oracle make to RedHat to make databases run faster will also benefit MySQL and PostgreSQL in the end.

    Look for RedHat stock to bounce back after everybody calms down and thinks about if for a while.
    • Reputation

      Is the issue open source "credibility and trust" or customer credibility and trust. And convenience.

      Buying interrelated software from a single source is a known advantage.

      Red Hat's only chance is that buyers from Oracle realize they are obtaining Oracle's products...
      Anton Philidor
    • Actually, I have found RedHat support pretty lacking in the past

      There are two types of Linux customers, the cheap 'we want everything to be free' socialist Stallman group and the group that is willing to pay for a decent product. Ellison doesn't care about Stallman's fans, he cares about people with money to spend. Ellison's announcement was to his existing customer base, not at Linux world and those people will be interested in a Oracle supported Linux distro as they can call one phone number for everything. Not everyone is in Linux because of a religious calling.

      If all of RedHat's customers with money follow Oracle then RedHat is in trouble, these are the people that pay RedHat's bills.
    • Agreed...

      Shops that are already using Linux show a fair amount of business and technical savvy. They are not likely to be duped into making hasty decision, as is the norm for those less savvy.

      Like them or not, Oracle runs mission-critical operations.

  • He's trying on the Microsoft Biz Model

    If he can fork Red Hat to a form that optimizes Oracle performance, he'll have the equivalent of M$ Advanced or Enterprise Server with MS SQLServer running on top of it. You won't have to buy M$ or Red Hat to run Oracle, Oracle will come as a single package. He can add security and network connectors for either Linux or M$. He can sell the entire system hardware and software, just like IBM. Smart move but one he could have done 4 or 5 years ago. Wonder what took him so long?
    • More than likely because

      ...it took Ellison's [i]sales[/i] people THIS LONG to memorize enough superficial info about RedHat Linux to be able to fake halfway intelligent pitches to their customer base. Either that, or His Ellison is just [i]that[/i] slow himself.

      So if Oracle ties their their own original product(s) so deeply into Linux, does that make THEM open source now as well?????
  • Does it make sense??????

    I like Oracle and wish them the best, but does this decision make any sense? Personally my thought is if Oracle really wanted to control the OS they would have put in a bid to buy Red Hat. Maybe they did and failed, I have no idea. But by rolling their own copy of Linux they will always be 1 step behind Red Hat. From a support standpoint they won't know the code as well either. Maybe that's why Oracle's support cost half as much.
  • Oracle supporting redhat?

    Only on paper baby.

    They came out with the instant client version, and before that well over a year ago. They promised rpms "real soon now".


    You'll notice that .zip is STILL only available as a .zip file. I asked about it and was told I could roll my own.

    If that's the kind of support I can expect from Oracle for RH Linux, I'll stick to RedHat. Seriously, can't Oracle afford to hire ONE GUY who can make a friggin RPM?

    Their announced support is vapourware, and I'm guessing the chances of Oracle actually managing to fork RHEL and maintain their own version is just about 0.0%

    A company that can't even make an .rpm file of their application and its client software has no hope of competing against RH in RH's own sphere.
    • One word, gunzip

      What, you can't handle gzip? RTFM

      Using RPM files is not mandatory or did Stallman also write that into the new GPL? The zip files work fine. It is the content of the zip file that I care about, I don't care if it fits your vision of the Linux world or not.
      • RPM files...

        ...are a lot more than just containers. They include dependency checking, scripts to update config files, uninstall information, and so on. Trying to install anything of any significant complexity from zips is at least a pain, and possibly disasterous if you try to install something critical that won't subsequently run due to a failed dependency.
        Henry Miller
  • Smoke and mirrors....

    Which is what Oracle is doing to justify their monolistic high prices...

    This is from the same guy who 10 years ago predicted that the desktop would disappear and all computing would be done by network terminals being driven by Oracle's software on central servers.

    I guess he forgot to factor in Moore's Law regarding processor development...or decided to put blinders on...which ever the case...OS developement/support is not their strong suite and will just disperse their resources.

    too bad Oracle doesnt develop a strategy to make their software affordable and indespensible...we use an Oracle backbone system and if I had my way I'd ship it back to sender because the cost does not justify the benefit.
  • Ellison's Red Hat hijacking manuever

    It's about the stock price of Red Hat. Look what happened when Ellison opened his mouth. Now they can buy Red Hat at a lower price. Best of both worlds.