Oracle to Red Hat: It’s Not Your Father’s Linux Market Anymore
October 13, 2010 
By Jeff Gould, CEO & Director of Research, Peerstone Research
You have all undoubtedly heard the news that Oracle launched its own branch of the Linux kernel a few weeks ago. Now Oracle generally ties with Microsoft as one of the world’s least popular software companies (though if Google were selling software instead of search ads it might be up there too). So it’s not surprising that Larry Ellison’s big announcement has met with some skepticism in the Linux community. But everyone knows Larry doesn’t give a pile of radioactive marsupial pucky what the open source community thinks about anything, let alone Oracle Linux. If truth be told, it’s not always evident that the management of Red Hat cares much either, but they at least are obliged by the firm’s open source history to at least pretend they care. After Larry’s brutal takedown of Red Hat’s ubercautious RHEL update policies (“We can't afford to be four years behind on the mainline of Linux”), Red Hat responded with a press release that struck the tone of a matronly aristocrat affronted by the uncouth antics of some money-grubbing interloper trying to snatch the string of pearls from her neck:
“With Red Hat Enterprise Linux, we continue to provide an industry-leading application platform, all based on open source technology, designed with the goal that end customers are and should continue to be the largest benefactors of Red Hat and our product offerings… Of course, with this unique open source operating model and leadership position comes competitors, challenging us and wanting to draw from our success. In response, we believe that our unique value and truly open position continues to be the sound choice for enterprise customers who seek lasting value in their IT investments – especially when compared to competitors who selectively open their offerings while seeking to lock in their customers.”
Larry’s trash talking of Red Hat’s update policies is a bit of a low blow considering that RHEL 5 is nearing the end of its life and RHEL 6 is only months away. But still, there can be no doubt that Ellison has identified a chink in Red Hat’s armor, and he is hammering away at it without mercy. The heart of the problem is that commercial Linux distributors have until now made two perfectly incompatible claims about their product: first, that because of its open source status Linux is a non-proprietary product that “belongs to everyone”, and second, that it is possible for non-proprietary products that belong to no one to nevertheless achieve competitive differentiation.
But the non-proprietary nature of Linux distributions is a myth. Clearly RHEL is a proprietary product, and the whole basis for Red Hat’s existence as a profit-making corporation whose shares are traded on the stock market is the claim that it can provide a better Linux than the competition. And don’t think that the differentiation comes only from services. No, it comes from the code itself. Every major Linux distro differentiates itself by way of thousands of vendor-specific patches whose purpose is to make their distro “better” than the competitors in ways that will be meaningful to the subset of Linux users who are willing to pay actual money for their bits. Red Hat, Suse and Ubuntu all do it. True, these distros have not yet diverged as radically as the vendor-specific flavors of Unix did in the 1990s. And the fact that these patches are all faithfully GPL’d allows Novell and Oracle to support Red Hat’s version of Linux as well as their own. But this doesn’t change the fact that these distros embody competitive differentiation strategies that are no different in kind from those embodied in traditional closed source software such as Oracle’s 11g database or – shudder – Microsoft Windows.
If you think that calling RHEL “proprietary” is just a figure of speech, think again. While Red Hat may tolerate CentOS and other cloners (provided that they strip out Red Hat trademarks), it does not approve of customers who want to use genuine RHEL without paying for it. A recent Red Hat marketing newsletter sternly instructs Red Hat channel partners that customers who choose not to renew their RHEL subscriptions “must de-install Red Hat Enterprise Linux software from the servers with the expired subscriptions”. GPL fans will point out that this injunction is mere table-pounding intimidation that has no legal force, but that’s beside the point. As far as Red Hat is concerned, no one is entitled to use RHEL without paying for it, and they’re not shy about letting people know where they stand.
What Larry has done is call the commercial Linux distributors’ bluff. He’s telling them he’s not going to play by their make-nice rules, which he thinks are just camouflage for traditional proprietary software strategies. Instead, he’s going to put his own features into the kernel, features that are nakedly intended to favor Oracle’s own software and hardware. From now on Oracle will work on a faster schedule than Red Hat or Suse, cherry picking new features it likes from the upstream community or – when it doesn’t find what it wants – creating its own. It will be up to the community and the other distributors to decide when or whether they want to accept Oracle’s contributions. But you can bet that Larry will not be shedding any tears if Oracle’s latest set of kernel enhancements (like improved NUMA awareness, a faster Infiniband stack, or better storage performance) fail to make it into RHEL 6. Oracle’s self-serving approach to the rules of open source isn’t really so different from the game Red Hat, IBM, Novell and other big kernel contributors have played for years. These vendors have always focused their contributions on features they thought would result in downstream profits for themselves. And there's nothing wrong with that, provided you don't mind a little hypocrisy. The only thing that’s new is that Larry is short circuiting the usual process by which new features make their way into the kernel and the various distros. He’s doing exactly the same end-run around the community and his competitors that Google did with the de facto Linux kernel fork that runs Android.
Until now Linux has been a gentlemanly cartel whose members pretended to sacrifice some immediate self-interest in order to benefit the community as a whole, while jockeying ferociously for competitive advantage behind the scenes. Now Johnny-come-latelies like Oracle and Google have torn off their masks and dared the other players to do likewise. Linux has been propagandized for years as the next Unix, the “good” UNIX that would leverage the noble democratic principles of open source to avoid the proprietary pitfalls of AIX vs. Solaris vs. HP-UX and all the other now forgotten exemplars of “bad” vendor-exclusive UNIX. But Larry Ellison and the Google kids have served notice that things aren’t going to work out that way. Having understood that the GPL is only a fig leaf, they’ve discovered that there is nothing to prevent them from taking Linux private, while still respecting the letter of the open source law.
It will be interesting to see how Red Hat, Suse, IBM and the other stakeholders in official Linux respond. These enterprise players aren’t really threatened by Android, at least not yet. But Oracle has got to be scaring them. True, Larry isn’t trying to steal share away from RHEL or SLES in the broader Linux market. Oracle’s 5,500 Linux customers amount to only a tiny fraction of Red Hat’s customer base. But they also amount to a similarly tiny fraction of Oracle’s database, middleware and applications customer base, and those are the people he cares about. He’s willing to cede the commodity Linux business of firewalls and file servers and web servers to others, but he wants to take back ownership of the stack in the Oracle installed base. Depending on how far he gets with that agenda, he could do some real damage.
Reader Comments (2)
It is kinda funny how Linux bumbled along for almost two decades as this shining light of openness but now we have the real world kicking in. On the one hand Red Hat threatening people who don't pay them for using their open source standard and on the other hand Oracle and Google pulling a "so long, thanks for all the fish" and taking Linux in their own direction with a hand wave to the Linux community.
I think the big question is what will HP and IBM do? In the end, they are the two biggest distributors of Linux server if you think of their hardware as the volume platforms for Linux server. Are they going to be content with just reselling whatever Red Hat or Novell hand them or will they also grab a distro and privatize it? Would really make sense for one of them to buy Novell.
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