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Fri 3 Nov 2006 08:00 PM

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Oracle’s picking on penguin brings risk

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At a briefing for EMEA journalists earlier this year, Oracle CEO Larry Ellison was asked if he felt he had mellowed over the years in the way he did business. Ellison replied that he had, and cited the 1998 incident in which his yacht Sayonara had been caught up in a typhoon off the coast of Australia, an incident that led to the deaths of six sailors from four other boats. The incident had, he said, made him realise that “life is short and that life is fragile, facing the walls of water you understand your own mortality and how quickly things can change.” A sobering thought, as all present agreed. It was only after the briefing was over that journalists noted that the incident had long pre-dated some of Ellison’s most aggressive business moves, including his takeover of the PeopleSoft/JD Edwards group.

Those of us who are looking for signs of mellowing from Ellison may be doomed to further disappointment. While last month’s OpenWorld event began with Oracle executives talking about how the firm wants to work more closely with partners and customers, it ended with Ellison declaring that the firm is going to take on former partner Red Hat at its own game by offering support for Red Hat Linux, at a cheaper price.

When a member of the audience asked what impact this would have on Red Hat itself, whether it might have the side-effect of killing the firm off, Ellison’s reply was brusque. “This is capitalism,” he said. “We’re competing. We’re offering a better product at a lower price.”

Such application of market forces are likely to benefit Red Hat customers, at least initially, by giving them options for their support. Since Oracle is talking about providing support at, on average, around half of Red Hat’s list price, customers could make substantial savings. Research firm Gartner believes that even if Red Hat customers want to stick with it for support they should negotiate big discounts for doing so, as much as 70% for large customers.

While this move means that end-users will benefit from cheaper prices, it might not all be good news however. While Oracle has promised to provide its own bug fixes, that has revived one of the greatest fears held by the Linux community: a fork in the OS. If Oracle distributes its own bug fixes and Red Hat decides to issue a different fix or not support Oracle’s option (because, for instance, it impacts on another part of the OS), that will bring problems. In such a case, applications that run on Oracle’s Linux wouldn’t run on Red Hat’s, meaning that customers would have to choose. This sort of split is what happened to Unix, putting many firms off adopting it and limiting its usefullness. And that should be a sobering thought for Red Hat customers.

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