Oracle CEO says may launch own Linux version.- 1.0 out of 5 based on 1 vote
Such a move by the world's top supplier of database management software into open source operating systems and applications would propel Oracle into sectors of the software industry where it has never directly competed.
It would also step up competition with rivals ranging from Microsoft Corp. to IBM to Red Hat and dozens of up and coming open-source start-ups, analysts said.
Ellison told the Financial Times Oracle wanted to sell a full range of software that included both the operating system and applications, or what is known in the industry as a complete "software stack."
"I'd like to have a complete stack," Ellison said in the interview. "We're missing an operating system. You could argue that it makes a lot of sense for us to look at distributing and supporting Linux."
Brendan Barnacle, an analyst at Pacific Crest Equities, said he doubted Oracle would launch its own version of Linux because competitors such as SAP AG would not want to rely on a major rival for open-source needs.
"It would be pretty challenging to come up with a new version of Linux," Barnacle said. "They have the resources, but this is partly a shot across the bow against Red Hat and others."
Open-source is growing in popularity because it allows customers to use applications for free and only pay for custom features, maintenance and support, cutting the cost of traditional software.
Oracle, which has long used open source to build some of its own software products, has in recent months sought to become more of a broker among various camps within the open- source movement, through acquisitions and partnerships.
Among publicly traded companies, Red Hat Inc. is the leading open source company, followed by Novell Inc. Scores of companies from Oracle and IBM to privately held players, such as MySQL and Zend, also play in the market.
Ellison said his company had considered acquiring Novell Inc. as a way to build on growing demand for open- source software that allows programmers to quickly build Web applications.
This could also help to keep Linux as an important counter- balance to Microsoft's Windows operating system that Oracle and other companies have long relied on.
Novell, Red Hat and Oracle declined to comment on Ellison's comments.
But analyst Barnacle said buying Novell would present Oracle with a host of organizational challenges. Instead, he believes Ellison's comments were a shot across the bow to companies such as Red Hat that are creeping closer to Oracle's core database business.
Deal-making in the industry has heated up since Oracle purchased open-source database software maker Sleepycat and Red Hat stepped in to buy one-time Oracle target JBoss, whose products compete with those of Oracle.
Ellison said the Red Hat-JBoss deal could shake up existing alliances in the industry and potentially force his own company to become more aggressive in the Linux market.
"Now that Red Hat ... competes with us in middleware, we have to re-look at the relationship -- so does IBM," Ellison told the Financial Times. "I don't think Oracle and IBM want another Microsoft in Red Hat."
Novell shares were up nearly 3 percent to $7.73 in early afternoon trading on Nasdaq, while Oracle shares were up 2 cents to $13.70. Red Hat shares were down more than 7 percent to $28.40 after Goldman Sachs downgraded the company to "underperform" from "in-line."
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