Oracle, Red Hat spar over Linux

Debate over whether Oracle is trying to kill off Red Hat

It was nearly two years ago at the 2006 Oracle OpenWorld conference that Oracle CEO Larry Ellison unveiled a plan to have Oracle provide support to Red Hat's own Linux customers.

The controversial plan sparked debate over whether Oracle was trying to kill off Red Hat by taking away Red Hat's revenue stream. Oracle and Red Hat representatives questioned during this week's Oracle OpenWorld conference in San Francisco offered strikingly different perspectives on how well Oracle's plan has worked out.

Asked if there has been any measurable impact on Red Hat, Andrew Cathrow, Red Hat product marketing manager, responded, "To be quite honest, not at all."

"Customers may mention it as part of their renewals," Cathrow said. "We've actually seen that customers want the close relationship with us."

"The customers that we talk to, their concerns are [that] certifications don't follow through for hardware or for high speeds and can Oracle support the distribution they don't maintain," he added. A customer who wants a different support agreement than what Red Hat offers can go to IBM, Dell, or HP for third-party support, said Cathrow.

Oracle released a statement offering a much rosier outlook on Oracle's efforts.

"Put yourself in Red Hat's shoes. Oracle directly supports Red Hat Linux and provides free downloads of compatible binaries. The quality of Oracle support is superior -- our customer satisfaction is very high -- and our price is lower," Oracle said.

"In addition, we provide value-added components, such as an Oracle Enterprise Manager management pack, Clusterware, and a clustered file system all for free. So if you are Red Hat, refusing to admit that Oracle is making progress is one of your last lines of defense," the company said.

"Our Linux ecosystem, currently 700 partners, is growing rapidly, and we now have more than 2,500 customers. Our renewal rates are excellent, and many renewing customers are increasing their server counts and adding Oracle VM. Additionally, many of those customers are large enterprises," Oracle said.

Oracle directly supports Red Hat Linux and provides free downloads of compatible binaries, the company said. Red Hat "may not be happy with our progress, but we certainly are," said Oracle.

Red Hat said the Oracle Enterprise Linux product supported by Oracle is in fact not Red Hat Enterprise Linux but a derivative distribution. Oracle countered that Oracle Enterprise Linux is 100-percent based on the Red Hat Enterprise Linux code base.

Cost-wise, Red Hat support costs vary greatly, priced from US$80 to US$2,499 for an annual, single-unit subscription. Volume discounts are offered. By Tuesday afternoon, Oracle had yet to respond to a morning request for its support pricing.

Red Hat financial statements do not indicate that the company has suffered from Oracle's strategy. Net income for the fiscal year that ended February 29 was $76.7 million, compared with US$59.9 million in the previous year. Revenues were US$523 million in the year that ended this February compared to US$400.6 million in the prior fiscal year.

The company on Wednesday reported revenues of nearly US$164.4 million for the fiscal quarter that ended August 31, a 29 percent increase from the same quarter a year ago. Net income was US$21.1 million compared to US$18.2 million for the same quarter last year.

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