Oracle and Red Hat
I was in the audience when Larry Ellison announced that Oracle will be offering enterprise-class support for Red Hat Linux. Oracle, of course, has made a big bet on Linux as the preferred platform for running Oracle. (Oracle's big data center in Austin has over 20,000 nodes of Linux. (It's also the single largest NetApp installation in the world.))
Larry argued that three key issues are slowing Linux adoption:
This clearly makes strategic sense for Oracle. When NetApp was small, one of our biggest challenges was convincing customers—especially large customers—that we could support them effectively. Multi-billion dollar companies like to do business with multi-billion dollar companies. Red Hat is still under half a billion in revenue. I know that support from Oracle will feel safer, especially for giant customers running their business on Oracle, so I think Larry is right that this will speed Linux adoption.
It also gives Oracle more complete control of the software stack all the way down to the hardware. One audience member asked, "Should we expect to get a complete stack from Oracle now, from the operating system all the way up through applications?" Larry's answer: "Absolutely."
To avoid confusing the Linux market by fragmenting the code base, Oracle will patch Red Hat code, but will resync after major Red Hat releases. I saw a potential tension here: Oracle will depend on Red Hat for distributions, but at the same time they are undercutting Red Hat's prices, which could obviously hurt them. So I asked, "What happens to Red Hat? Is killing them an unintended side effect, or do you have a plan to help keep them alive?" In retrospect, it was a stupid question, because Oracle can always just buy Red Hat if they want to keep them alive.
Larry's answer was interesting: "This is capitalism. We're competing. We're trying to offer a better product at a lower price." On the other hand, he also said, "I don't think that Red Hat is going to be killed. I expect that Red Hat is going to compete very, very aggressively." He was clear that his real goal was to make Linux better, which helps Oracle because they've bet heavily on Linux. Red Hat's response is that they will indeed compete aggressively.
From my perspective, the most interesting audience question was this: "What about incorporating some storage systems, like Network Appliance, maybe?"
Larry's response was: "Well, the great... uh, you know, there's always next year." He kind of stumbled with the response, which gave me the sense that it wasn't something he had thought much about. I found that reassuring.
Larry argued that three key issues are slowing Linux adoption:
- No "true enterprise support" available.
- Support costs too much.
- Threat of lawsuits from SCO.
This clearly makes strategic sense for Oracle. When NetApp was small, one of our biggest challenges was convincing customers—especially large customers—that we could support them effectively. Multi-billion dollar companies like to do business with multi-billion dollar companies. Red Hat is still under half a billion in revenue. I know that support from Oracle will feel safer, especially for giant customers running their business on Oracle, so I think Larry is right that this will speed Linux adoption.
It also gives Oracle more complete control of the software stack all the way down to the hardware. One audience member asked, "Should we expect to get a complete stack from Oracle now, from the operating system all the way up through applications?" Larry's answer: "Absolutely."
To avoid confusing the Linux market by fragmenting the code base, Oracle will patch Red Hat code, but will resync after major Red Hat releases. I saw a potential tension here: Oracle will depend on Red Hat for distributions, but at the same time they are undercutting Red Hat's prices, which could obviously hurt them. So I asked, "What happens to Red Hat? Is killing them an unintended side effect, or do you have a plan to help keep them alive?" In retrospect, it was a stupid question, because Oracle can always just buy Red Hat if they want to keep them alive.
Larry's answer was interesting: "This is capitalism. We're competing. We're trying to offer a better product at a lower price." On the other hand, he also said, "I don't think that Red Hat is going to be killed. I expect that Red Hat is going to compete very, very aggressively." He was clear that his real goal was to make Linux better, which helps Oracle because they've bet heavily on Linux. Red Hat's response is that they will indeed compete aggressively.
From my perspective, the most interesting audience question was this: "What about incorporating some storage systems, like Network Appliance, maybe?"
Larry's response was: "Well, the great... uh, you know, there's always next year." He kind of stumbled with the response, which gave me the sense that it wasn't something he had thought much about. I found that reassuring.
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