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Inside Oracle's bombshell plan to support Red Hat

Oracle's decision to get into the open source Linux business shouldn't come as a major surprise to Red Hat, according to one IT industry expert.

Oracle's bombshell plan to offer full support for Red Hat Inc.'s Linux distribution at half the price represents the first time a major applications vendor has jumped head first into the operating systems business, according to operating systems expert Tony Iams, a vice president and senior analyst with Ideas International in Port Chester, New York. caught up with Iams to discuss the details of Oracle's plan and get his opinion on whether or not Oracle's strategy will severely hurt Red Hat's business over the long term. Here are some excerpts from that conversation:

Could you briefly describe what Oracle is doing with regard to Red Hat Linux?

Tony Iams: Oracle is exploiting the open source business model to try and offer a competitive alternative to Red Hat for supporting Linux. This is something that is clearly enabled by the open source model where a vendor such as Red Hat offers a product that virtually anyone else can recreate under their own brand. They can take the exact same technology that Red Hat has and offer their own version of it, under their own brand, and with their own support program, without having to become too deeply involved with the development.

Red Hat's ties to the industry run quite deep at this point and [Oracle] can't just uproot those with one announcement.
Tony Iams
vice president and senior analystIdeas International

Will Oracle actually distribute copies of Red Hat Linux?

Iams: They can't call it Red Hat because Red Hat owns the rights to the name. What they can do is use the code the Red Hat provides and offer it as a package because all of Red Hat's software is open source.

Is this an unprecedented move on Oracle's part?

Iams: No. There have been other instances where companies tried to clone Red Hat. But they were generally much smaller companies. What is new about this is that a major vendor from a different sector of the industry -- a company that was not in the operating systems business before -- has now gotten into the operating systems business to compete with one of the existing players.

How is Red Hat going to respond? By focusing on the fact that they offer the JBoss application server?

Iams: That is one way. Red Hat now has application server technology that they acquired with JBoss -- and Oracle has its own application server that it positions instead. Moreover, the development process behind JBoss is a little bit different than the development of the regular Linux kernel in that it's a little bit more of a closed process, so they have a little bit more control over the rate at which they distribute the code to the open source domain. It gives Red Hat a little bit of leverage that they wouldn't have had with the mainstream code inside of Linux.

How does JBoss stack up against Oracle's application server?

Iams: I haven't done a head-to-head comparison but you know there are many factors that come into play when customers try and decide which application server to invest in. There's technical capabilities, licensing costs and then sort of the ecosystem that's built around the application server so that the applications can really take advantage of it. In that regard, Oracle's application server is woven tightly into the rest of its application stack and into its database. Their applications have a little bit of a home field advantage when it comes to integrating into an Oracle environment, whereas JBoss has a broader presence across the industry and is more of a player in the open source ecosystem. JBoss benefits from mindshare across many operating systems and databases.

Do you think Oracle's decision to support Red Hat will severely hurt or even kill Red Hat in the long run?

Iams: It's rare that anyone gets killed outright because there are such huge investments in Red Hat's technology and their support ecosystem and their Red Hat Network and in the relationships that Red Hat has with the systems providers. Red Hat's ties to the industry run quite deep at this point and [Oracle] can't just uproot those with one announcement. I don't see it killing Red Hat. I think that it's going to give Red Hat competition and competition is generally a good thing in the industry. Oracle looked at Red Hat's business and decided that they could come up with a competitive alternative. It's a business opportunity that they looked that that they decided was too good to resist. When you put those together with Microsoft's relationship with Novell, it has certainly been a tough week for Red Hat. But it's really just a question of Red Hat having more competition now and having to be a little bit more nimble and agile in their offerings. It won't be quite as free a ride as it has before.

More on Oracle and open source:

Oracle announces full support for Red Hat users

Spotlight on Oracle and open source

Oracle says it will support Red Hat users for half the price they're paying now. Do you expect Red Hat to respond by slashing prices?

Iams: It's too early to tell because a lot of questions go into determining what pricing should be for open source. You need to look at the value that you get from Red Hat versus Oracle's offering. We'll need to really see exactly what Oracle's offering consists of in terms of the functions that are built into it, and in terms of the terms that go into its licensing and the discounts that it provides, and to what extent its preloaded with the systems from OEMs. There are many factors that go into the revenue associated with a distribution like this and until we see exactly what Oracle's offering is, again, it's too early to say how Red Hat will have to respond.

Oracle says it will provide full indemnification or legal protections for its users. Do you expect Oracle to provide better legal protections than Red Hat and other Linux distribution providers?

Iams: It's not clear. The [intellectual property] questions here run quite deep and are potentially quite far reaching when you examine the impact of patents and so on. And Oracle clearly has a lot of intellectual property and thus they're in a position to provide some degree of protection. But they compete with Microsoft as well and so to what extent they're going to take sides in this potential conflict remains to be seen. Anytime there is a risk of a patent war starting you have to look at where the arsenals of patents are and who might potentially participate and take which side and I think it's too early to tell.

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