Look out Red Hat -- it appears that Mr. Ellison, Oracle's rock star CEO, may be looking to embed a Linux product into Oracle. Is this good or bad? And who is it good or bad for? According to Matt McKenzie. Editor, Linux Pipeline, a newsletter that I subscribe:
"... this isn't "coopetition," or anything else you can describe with a cutesy moniker -- this is the IT industry's second-richest, and perhaps most ruthless, executive deciding how best to rub out a source of persistent irritation. Assuming Ellison pays attention to his grudge du jour long enough to follow through on his ruminations, the enterprise Linux market a year from now will consist of Oracle -- and three grease spots where Novell, Red Hat, and JBoss were last seen."
Yes, Mr. Ellison does have pretty good reasons for embedding a version of Linux into Oracle's existing software. It all has to do with who owns the stack. And Mr. Ellison wants nothing if not to own the entire stack (based on Linux) and put Microsoft right out of business. IMHO -- that will take some doing. It is certainly no secret that Oracle has been pushing Linux for some time. Why? Well, it does give Oracle users using Microsoft's operating system and applications an alternative stack. Can you see Mr. Ellison drooling yet?
Apparently the acquisition-happy CEO has been casting his eye around to see who he could gobble up to supply the missing pieces in the stack. According to an interview with Financial Times, he has considered purchasing Novell as a quick way to get Oracle's own Linux.
What does this mean to Red Hat? Well, it is not good news, that is for sure. If Oracle does purchase Novell, life becomes suddenly much more difficult for Red Hat ‚Äď particularly if, as Mr. Ellison stated in the FT article, IBM decided to follow suit - which it most certainly would.
So -- why wouldn't Oracle just buy up Red Hat? According to the man himself in the article: "I don't see how we could possibly buy Red Hat... I'm not going to spend $5 billion, or $6 billion, for something that can just be so completely wiped off the map".
Mr Ellison states that there are two reasons for not buying Red Hat or Novell. The first one (probably the most important one) is price. Apparently open source companies have finally made it into the big league with their price tags. Red Hat‚Äôs purchase of JBoss last week was a bit of an eye-opener. By the way, JBoss was a company that Oracle had itself tried to buy.
Mr. Ellison goes on to say in the FT article, ‚ÄúIf an open source product gets good enough, we‚Äôll simply take it,‚ÄĚ he said. ‚ÄúWe can do that, IBM can do that, HP can do that ‚Äď anyone with a large support organization is free to take that intellectual property and embed it in their own products. You can build a sustainable business [in open source], you just can‚Äôt charge a lot for it. There‚Äôs brand value ‚Äď there‚Äôs real brand ‚Äď there‚Äôs people, and that‚Äôs it." Well, there you have it...
The second reason for not buying a Linux company, according to Mr Ellison, is also quite likely. He believes that as soon as one big company buys a Linux company, all the other big technology vendors would abandon it. ‚ÄúI don‚Äôt see how we could possibly buy Red Hat ‚Äď IBM would just say, ‚ÄėLarry, congratulations, we‚Äôre going our own way‚Äô,‚ÄĚ he said.
According to Lisa Vaas, another of my favorite writers, "Novell is too expensive as well. Why pay billions for Novell SUSE Linux when there are much cheaper and more deployed Linux distributions out there, with robust communities in place, to be had for probably what would amount to a few million? Ellison is likely telling us he doesn't have to buy a company with a huge existing open-source presence."
Ari Kaplan, president of the IOUG, stated in a recent conversation with Lisa that Oracle can be trusted not to lock anybody into an Oracle-only setup. "Based on recent history, you can still run PeopleSoft on IBM or other databases," he said.
Ah, I love naivety...
Yours in BI Success,
Posted April 20, 2006 12:20 PM
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