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Oracle is not buying Red Hat

Oracle is not buying Red Hat The rumor mill has it that Oracle may be buying Red Hat. Don't believe it. All it took was one mention that Oracle might do well to own Red Hat, but that the timing wasn't right, by Jefferies & Co. analyst Katherine Egbert for people to start talking up Oracle buying Red Hat. Folks, it's not going to happen. IBM will buy Sun. Oracle buying Red Hat? No.

This isn't the first time that Egbert has dreamed up fantasies of Oracle buying Red Hat in the minds of silly investors. She was wrong then. She's wrong now.

Why? The reasons why it didn't make sense in 2006 are still the reasons the move makes no sense today.

First, what could Oracle CEO Larry Ellison get from buying Red Hat? Red Hat Linux? Duh, hello? Oracle already has RHEL (Red Hat Enterprise Linux), except they call it Oracle Unbreakable Linux. So, he'd want to buy the real thing because...? Let me know when you come up with a good reason.

It's certainly not because Oracle wants to own an entire software stack. The Linux vendors are more than happy to work with Oracle. Besides, Oracle is already one of the leading contributors to the Linux kernel. Oh, and did I mention that Oracle already distributes its own version of RHEL?

So, again, why buy Red Hat, a company with a market capitalization of over $3 billion? Oracle could afford it, but come on, Oracle CEO Larry Ellison didn't become a billionaire by wasting billions. At least when he burns money on his planes and yachts, he gets a heck of a ride out of it.

If you want to talk up potential deals, then you can talk about how IBM/Sun makes sense. Or, if you want something more speculative, you can consider Cisco picking up VMware from EMC. But, Oracle buying Red Hat? It's not in the cards.

What People Are Saying

Gó home Oracle, you are nothing but a ripoff

Just consider thees facts...

Oracle Enterprise Linux is...
A support program. It is not a distribution. Oracle refers to the Red Hat “compatible” distribution it provides as Oracle Enterprise Linux.

Where does Oracle get those patches and updates?
Oracle claims they take RHEL patch source code directly from Red Hat as soon as they publish them; then recompiles and redistributes the updates in binary form.
The team at CentOS.org claim Oracle is using sources from them.
No one really knows for sure.

The Risks of using Oracle to maintain RHEL
Mixing Oracle generated patches and updates results in the creation of a custom Linux distribution that is neither RHEL nor OEL
Independent software vendor (ISV) that certify to either won't support this kind of distribution
Independent Hardware Vendors (IHV) That certify to either won't support this kind of distribution
There is no support agreement between Red Hat and Oracle
Emergency fixes need to be generated and maintained by Oracle

The key risks are
Dangers of a forked distribution
Certifications of hardware and software won't apply or be supported by vendors
Oracle's inability to manage and maintain a code base engineered by a direct competitor
Oracle's inability to support the entire distribution
Oracle is unable to escalate issues to Red Hat for assistance.
Oracle's inability to influence product roadmap
Delayed access to security updates and bug fixes (24 to 72 hours after Red Hat)
Increased risk of vendor lock in
Lack of support for broad base open source software movement, may lead to limitations for customer.

Certifications
Oracle claims that as they recompile and redistribute RHEL code, the Hardware and Software certifications remain valid

They don't!!!

Oracle is a forked version of Linux that requires its own certifications
Many Software and Hardware vendors publishing separate support matrix - example EMC, HP
Even Oracle provides separate certification for RHEL and OEL
Government certifications of RHEL (EAL, CAPP etc) will not be carried over
Performed with specific releases and certifications
Any changes result in loss of certification

Roadmap
What's Oracle's Linux Roadmap?
They can't say for sure
Red Hat works with customers, software vendors and hardware vendors
To define direction of Red Hat Enterprise Linux
Product roadmap based on customer input and needs
Oracle has no input in direction of the product it is offering to its customers
Customer cannot request support for new driver or hardware
No new features requests
Any new features or changes added by Oracle will be reversed at next minor release
Oracle re-bases OEL on every RHEL minor release.
What's coming in RHEL6?
Oracle doesn't know!

In my opinion OEL is a dangerous solution, and I don't understand why they will put there customers at risk by selling them OEL..

I met an Oracle account exec once

He was a real piece of work. He told me how they qualified an "inbound lead." If the company calling was large enough, he would take the call and pursue the account, with an eye to getting 2% of the company's revenues as his billings. If they were too small, they were "thrown to the call center" where they were offered SMB solutions. I asked him about CAL policies. He said, well, if you have a program in your warehouse drive by oracle, and you interrogate that database to feed a mysql database, which then feeds 100 customers, you should get 100 Oracle CALs.

Oracle will die, unloved.

Oracle would not be buying an OS

They would be buying sales and support. That would be worth quite a bit to them.

However, that presupposes that Larry Ellison is interested in moving /down/ the app stack. To date, every big acquisition that Oracle has made has been either a lateral move or up the stack.

Besides, buying an OS company would significantly weaken the huge cross platform advantage that he currently enjoys over Microsoft because other DB vendors would be very quick to highlight it. It would become much tougher for his sales team to convincingly sell to Windows shops.

Until someone can explain why he would be willing to abandon that strategic advantage, I will continue to regard any such story as unlikely at best.

Can anyone confirm if

Can anyone confirm if Katherine Egbert has Redhat or Oracle stock? As this is the third time i've heard this news in 3 years from the same person? I'd say investigate her for stock fraud, if she has stock ;)

Its not called "Oracle

Its not called "Oracle Unbreakable Linux". It's called "Oracle Enterprise Linux" or OEL for short. Nice job doing research.

In that very same LinuxWatch

In that very same LinuxWatch article you mainly say that Oracle will not *EVER* come out with its own brand of Linux, and then made the announcement about eight days later, on the same site, that Oracle was re-branding Red Hat to make its Unbreakable Linux.

"I don't care how many times you hear stock analysts say that Oracle is about to launch its own Linux. It's just not going to happen." -sjvn, LinuxWatch, October 17, 2006

While there is a huge difference between distributing your own brand of Linux and taking over an entire company, no offense, but maybe making predictions about Oracle isn't where you have your best luck.

Oracle didn't come out with their own Linux

They simply took RHEL, removed "Red Hat" and pasted Oracle in its place. No one thinks for a moment that Oracle Linux is anything but a direct copy of RHEL.

Read in context, you'll see I was dismissing that Oracle would buy Red Hat or Canonical or write up their own house-brand of Linux

Steven

My apologies, taking a

My apologies, taking a second look at that article I see that they were focusing more on support than anything.

I'm sure that you can understand how all that could be confusing, especially because the first time I saw those articles was back when I was just getting interested in Linux.

No worries. Oracle makes it

No worries. Oracle makes it confusing to everyone.