The Oracle Effect

Larry Ellison announces a new Linux distribution based on Red Hat's source.

The rumors turned out to be true. Oracle was predicted to make a big Linux announcement this week and you would be hard pressed to make a bigger one than this.

Larry Ellison announced support for Red Hat and the release of Oracle’s own Linux distribution based on Red Hat’s source code at his Oracle OpenWorld keynote address on Wednesday. The new distribution and support model, dubbed Unbreakable Linux 2.0, puts Oracle in direct competition with Red Hat in such a way that it may not fragment the Linux marketplace.

Oracle aims to provide full support for Red Hat Linux server above and beyond what Red Hat provides, at less than half the cost. The company has created a number of support levels that mirror Red Hat’s current offering and two additional “Premier” level that Oracle says Red Hat simply can’t provide. Additionally, the company will take on the job of fixing bugs in the Red Hat code and adding Oracle-specific features to their own distribution of Linux. Unbreakable Linux 2.0 will take the freely available source from the latest release of RHEL, strip it of any trademarked content, and distribute it as a free binary on the Unbreakable Linux Network.

The goal, says Ellison is to “enhance and speed the adoption of Linux and make it mission critical in the datacenter.”

However, Ellison was quick to mention, “You can’t fragment Linux,” several times. Oracle has no desire to create a distribution of their own that is incompatible with what the majority of their Linux customers are running (Red Hat). However, they feel they can provide better support and development of the RHEL platform than Red Hat can themselves.

New releases of RHEL will be “resynchronized” with Unbreakable Linux 2.0 to ensure that new Red Hat features are included in the latest version of Oracle’s distribution but will also include Oracle’s features and bug fixes that were not incorporated into the Linux Kernel or Red Hat release.

Additionally, the company is offering a 90-day incentive to entice buyers: the support service will be free to any existing Oracle customer that joins the Unbreakable Linux Network and half-price to any Red Hat customer not running Oracle applications.

Representatives from Red Hat on the Oracle OpenWorld tradeshow floor declined to comment on the announcement. Press relations for the company indicated that CEO Matt Szulik would be available for comment via phone, however the queue was “extremely long” at the time of this writing.

The obvious question to ask is how does Red Hat adapt to this challenge?

Revenue from support contacts are the foundation of most open source business models, and Red Hat is no exception. (see Middleware Stacks and the Cost of Going it Alone
) What Oracle has done is really a worse-case scenario for any open source business; when your open source efforts become the basis for a product or service that ultimately invalidated you altogether. It doesn’t happen often because it takes a company the size of Oracle to do something like this and do it well.

If Oracle is successful in convincing enterprises they can deliver on their Unbreakable Linux promises, Red Hat is in the position of having their enterprise server product distributed by Oracle as a free binary and their support costs dropping by more than half or migrating to Oracle entirely.

In the short term, for Red Hat, it’s business as usual. And many of the things I wrote in a recent editorial about Red Hat’s position in the marketplace still hold true. (see Five Reasons I’m Not Worried About Red Hat) However, none of that thinking factored in a competitor like Oracle and end result is that a supported, free version of RHEL 5 could cause serious damage to the company.

So, why? Why would Oracle want to take all of this on? The easy answer is that Oracle wants to be Microsoft.

Absolutely. I don’t doubt this for a minute. Ellison has repeatedly stated that his job is make Oracle the #1 software company in the world. However, when you look at the amount of revenue Unbreakable Linux 2.0 will likely bring into the company, it is incidental compared to everything else Oracle does. Which brings us to what some are saying on the floor of Oracle OpenWorld: Ellison is mad at Red Hat. Scuttlebutt has it that he’s disappointed with Red Hat’s level of support for Oracle customers as well as their ability to drive the adoption of Linux in the enterprise space.

Regardless of the reason, Oracle has just altered the course of commercial Linux in as big a way as possible. If you’re an enterprise customer you may be applauding it. If you’re an open source advocate, your hands may be in your pockets.

The real question is which side are you on?

Bryan Richard is the editorial director of Linux Magazine.

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