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Will Red Hat Survive? 158

An anonymous reader writes "Red Herring has an in-depth analysis interviewing industry experts on what the future of Linux distributor Red Hat will likely be now that Oracle is offering cheaper support and services essentially identical to Red Hat Linux. Will Oracle purchase Red Hat? Or is it not yet too late?" From the article: "Mr. Dargo countered that Oracle's move indicated a lack of understanding of the value that Red Hat's support and service provide. But he noted that Red Hat could be vulnerable if Oracle manages to provide better service. 'If the strategy at Oracle works out, Red Hat is going to face some serious issues, but I don't think it is going to work out,' he said. 'There are lots of opportunities for Red Hat to do some aggressive and creative things to turn around.'"
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Will Red Hat Survive?

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  • Prices (Score:3, Interesting)

    by Kangburra ( 911213 ) on Saturday October 28, 2006 @05:28AM (#16620788)
    Red Hat have been over-charging for a long time. If Novell had done something decent this would not be happening now.

    Oracle will give them some healthy competition, may the best distro win. :-)
  • If Redhat dies (Score:3, Interesting)

    by unixmaster ( 573907 ) on Saturday October 28, 2006 @05:41AM (#16620834) Journal
    What will Oracle rip^^^base its Unbreakable Linux on?
  • by jkrise ( 535370 ) on Saturday October 28, 2006 @05:50AM (#16620876) Journal
    RHEL might be the biggest Linux OS for (supported) Oracle deployments, but RedHat is much more than just an RHEL or Linux services company. In fact, one could argue that the success of RedHat Linux and the JBoss / JEMS platform might indeed be a serious threat to Oracle's survival... once other databases are made part of RedHat's application stack.

    By undercutting and subsequently angling for a takeover of RedHat, Oracle is getting into a business which is not beneficial to customers and end-users.... the focal point of the entire Open Source and Free Software movements.

    If Oracle wants to offer support Linux-based database solutions, it ought to come up with it's own distro. NOT kill RedHat.. the no. 1 distro. What would happen to RedHat's non-database successes... middleware, applications, hardware collaboration, education and research, training and services... solutions partners etc.? It would appear these are threats to Oracle's long-term survival.. but they are the most valuable things for customers (not just servers and infrastructure).

    HP took over Compaq took over Digital... and now, the Unix businesses of Compaq and Digital (both very valuable for customers) have been lost forever.

    Oracle might compete... but must not be allowed to takeover RedHat. In many ways they are bigger stumbling blocks to the Open Source revolution than even Microsoft.
  • I Didn't Get It (Score:3, Interesting)

    by BeeBeard ( 999187 ) on Saturday October 28, 2006 @07:41AM (#16621182)
    I'm sorry to reply to your post twice, but there is of course no way to edit former comments :) Here goes:

    Despite what Mr. Greenbaum says, Red Hat does have some intellectual property. In fact, that's why Oracle (according to the article) is indemnifying its customers against IP issues that may crop up, just to be on the safe side.

    Second, Redhat owns something better than intellectual property. They have kernel and application programers. They have the people who can offer customized support and insight that few can match.

    The real problem is that all that great stuff you mentioned will belong to Oracle's if/when Red Hat is bought out. After all, we are talking about a company that pulled down no more than $200 million last year revenues [] vs. a company that pulled down $14.4 billion in revenues last year []. The saying "I could buy and sell your ass" seems to apply here.

    Offering support for half the price on the same product reads like the first part of a plan by Oracle to bilk Red Hat long enough, and make its stock price low enough, in preparation for a buyout. I seemed optimistic that Red Hat could use the time between now and then to improve its product and support and maintain its hold in the corporate Linux market, but upon further consideration I am more skeptical. Red Hat can "love Linux" all it wants, but that won't make stockholders happy and it won't keep the wolves away from the door.
  • Re:Prices (Score:4, Interesting)

    by vhogemann ( 797994 ) <victor&hogemann,com> on Saturday October 28, 2006 @08:49AM (#16621458) Homepage
    And Oracle didn't made a good job copying RHEL either...

    From the screenshots I've looked at, they couldn't even manage to get the icons right: reenshots/scaled/Oracle%20Enterprise%20Linux%20R4- U4/36.gif []

    Also... why ship X11 at all? This Oracle Enterprize Linux should be focused at the server-side, shipping with a pre-installed Oracle DB, an Java EJB Container, and a nice web-based console to administrate all that.

    It would be a much smarter move to partner with RH and a hardware vendor to push an Oracle Appliance to the market. Plug it, configure some basic parameters via web interface, and start using! This would add something to Oracle, simplicity, something that they currently lack, and that could make a difference aggainst the competing DB products.

    I don't know if Oracle actually has the expertise to sell support, and mantain, a linux distribution. Their first attempt at putting one thogether is patetic.
  • by Lonewolf666 ( 259450 ) on Saturday October 28, 2006 @08:57AM (#16621484)
    Novell's distro (AKA SuSE, free version at []) is not exactly an unknown also-ran distro. They had several years of experience before being acquired by Novell.
    Now SuSE is often, and to some extent justly, accused of being overly eager to look like Windows. But I still consider it a distro that can be recommended to Linux newbies. It is easy to install and get started with, and from there you can work your way up to more "hardcore" distributions.
  • Re:They Don't Get It (Score:3, Interesting)

    by Marsala ( 4168 ) on Saturday October 28, 2006 @09:12AM (#16621552) Homepage

    I absolutely agree with you on that last point: credit where credit is due. At the end of the day, RH's products are open sourced and the do a lot of good work to protect open source as it's key to their business model.

    But this doesn't change the fact that RH is a pain in the ass to deal with as a customer. I'm trying hard to remember one single conversation with them that didn't start off with the assumption that I was a drooling imbecile or where I got back a prompt and useful answer instead of an attempt to redirect blame for the problem back on me. I can't recall any. What I do recall is a vibe of total disdain, being made to feel like I was wasting their precious time with my stupid questions, and what can only be described as a feedback event horizon where bug reports and patches just disappeared into bugzilla never to be responded to nor seen or heard from again.

    And it wasn't just me that got that impression. My bosses did, too. I could tell when they'd talked with RH recently because they always swung by my office to ask, "Hey, what do you think about SuSE?"

    From a customer service standpoint, RH makes their money because they're the only large company who supports RH products. Aside from Ximian's weak effort to extend support of RH 7-9, they have no competition. While Oracle isn't known for its customer service either, all they really have to do is offer less frustration than RH and suddenly their offering becomes a very, very attractive alternative. And while RH does indeed employ some outstanding technical talent, they've only got a fraction of the bright folks in the open source community... if Oracle plays it right and demonstrates a Googlish atmosphere of encouraging open source innovation in their Linux division they could easily build up their own talent pool.

    So, yeah. A lot of "if"s in that equation. If I was RH, I wouldn't be losing sleep just yet.

    But I would also be asking what I could to do build customer loyalty and prepare for a day when I'm no longer the only game in town for supporting RHEL in the next quarterly strategy meeting.

  • I am one of the people much like the GP who got burned by Red Hat during the RH9 to enterprise Linux conversion. I had just bought a (personal) subscription to show support for a company that I respected, which was canceled with no refund about 3 months into a year contract. This, unsurprisingly, left a very bad taste in my mouth.

    However, all is not lost for those who prefer a Red Hat style distribution that is stable rather than the Fedora line. I am currently extremely happy with CentOS [], a community rebuild of the Red Hat Enterprise Linux line. I never used Red Hat's support other than for updates and now I find that I prefer yum over up2date for updates anyway. I would also like to take a hat off to the KDE-RedHat [] and RPMForge [] projects, who provide many of the packages that RH is lacking; especially in the area of desktop support.

    My point here is that while I was an avid supporter of Red Hat, I have found that with Linux I am not tied to a single vendor and in fact, my experience is exactly the opposite. The only one losing here is Red Hat because I no longer buy support from them.
  • A market for both (Score:5, Interesting)

    by ( 152591 ) on Saturday October 28, 2006 @10:01AM (#16621798) Homepage
    There are plenty of companies which are concerned with nothing but the best price for their support. Usually these are small companies, though sometimes they are larger ones too. Companies *really* concerned about cost ignore companies like Oracle and instead run Debian, SuSE, White Box, or some other distro. If they need support, they tend to find the least expensive, small consulting firm they can (like mine). The ones that believe "nobody ever got fired for buying IBM" will likely consider Oracle.

    But, the big companies will stick with Red Hat. Why? Simple. When they have an issue with an application, Red Hat has engineers which troubleshoot the problem, fix it, then release a new package. Sure, Oracle *could* do that, but can they get Red Hat to accept the patches? More importantly, will they just say "sorry, that's a bug in the vendor's software"? Red Hat has engineers who are dedicated to patching and improving the OS.

    That said, the large companies are likely to exert a bit of muscle to get a better deal on their Red Hat contracts by comparing the Red Hat support costs to Oracle. In the end, this will certainly cost Red Hat some revenue, but I don't personally see it as dire as wall street did on Thursday. And in the end, the marketis certainly big enough that Oracle could end up having a positive influence on Red Hat's market share, as yet another company advocated Linux to the masses.
  • Re:I Didn't Get It (Score:3, Interesting)

    by Pharmboy ( 216950 ) on Saturday October 28, 2006 @10:33AM (#16621950) Journal
    Very good question. First, I am NOT opposed to paying for support. I previously DID pay for support. I am opposed to paying $800 if all I want is guaranteed updates. I have no problem paying per phone call, a reasonable fee for them to provide updates ($40-$60 per year per machine). RH needs to stay in business, and I WANTED them to stay in business, which is why I paid for distros, even tho they were free.

    I thought about Whitebox and CentOS, and had considered them both because I was already familiar with the quirks of RH from years of use, AND they are both very legitimate RH clones. What KEPT me from using them is (ironically) the fact that they don't charge. This means they can stop updates at any time, and leave me stranded. I need to know the company is going to be around for 3 to 5 years, as I can't afford to switch distributions every 6 months. That can be more expensive than even RH fees.

    In a nutshell, I want minimum support from a real company, and I am willing to pay for the support I actually use. It may be that someday I will NEED $800 worth of support, but today isn't that day.

    What I like about Linux is that it is Free (as in speech). As to the price, I expect I will pay more for it in dollars, but save money in time and headaches. I don't need permission to add users, change the role of the machine, or move all the software to another machine. But RH remade itself in Bill Gate's image, in that I am forced to pay for things I don't want or need, and their less expensive version of the software (Fedora) is just as weak as comparing XP Home to their Enterprise Server.

    It isn't that RH changed to two versions and charged for support for better quality version, it is HOW they did this, completely DUMPING the little guy and leaving him with no options. They took my money then dropped all support for my software. No refund, no apology.
  • by ahmusch ( 777177 ) on Saturday October 28, 2006 @06:28PM (#16625766)
    is a loss leader for Oracle, and it hurts Microsoft. Oh, and will make it cheaper for Oracle to buy them later, if they want to, which they do, because Larry's pissed at RedHat's CEO for buying JBoss.

  • Idea (Score:1, Interesting)

    by Anonymous Coward on Saturday October 28, 2006 @09:12PM (#16627316)
    I think RedHat should place an addendum to the license on which it is released. Basically, Oracle and all subsidiaries and parent companies may not use, modify,... etc. etc. any RedHat package including Fedora. Anyone else use and modify at your own discretion.

    Screw Oracle, updates will basically cease to exist for them and so will their customers.

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