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Oracle & Red Hat’s Symbiotic Relationship

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There is a symbiotic relationship between Oracle & Red Hat now. Yes there was one before with Oracle’s database business on Linux, but it’s even more intertwined now.

This relationship is similar to what we see between CentOS and Red Hat already.

CentOS takes RHEL and redistributes it for free. If enough customers of Red Hat were to opt for CentOS instead of RHEL, Red Hat’s revenues would suffer. Hence, Red Hat would cut expenses, including their R&D spending. This could lead to development quality and speed on new feature addition issues inside of RHEL. This, by implication would lead to the same issues within CentOS. As a result, fewer customers would use CentOS, thereby returning the balance between Red Hat and CentOS.

The same scenario applies to Red Hat & Oracle, at least in the near term. That’s why I have a real problem with the likes of Matt Assay crying bloody murder. DISCLAIMER: I don’t like Oracle’s business practices in general. I am incredibly happy that IBM knows how to contribute and participate within the Open Source community and that this is not a move you could really see IBM making. I’m just responding to the outcry from a business and customer standpoint.

From a customer standpoint:

1] If Oracle does a terrible job providing support for RHEL, customers will go (back to) Red Hat. There will be some customer pain while they migrate (back) to Red Hat support, but at least they aren’t locked in.

[2] If Oracle does a great job at it, customers win. (Unlikely if you ask me :-)

[2b] If Oracle wins a lot of (new) customers (from Red Hat) and inhibits the growth of Red Hat, this would cause Red Hat to spend even less on R&D than they do. Now, Oracle has a choice:

  • [2b-1] Continue to base their support business on RHEL, even though the lowered R&D spending by Red Hat is resulting in a lower quality product with fewer new features. (Unlikely because this is a do nothing option and customers would lose.)
  • [2b-2] Add more Oracle development resources to the Linux development community to make up for the reduced Red Hat R&D. (Likely because we have to assume Oracle will need to add some employees to the community ASAP to help support the unbreakable linux network. Hence, no net negative impact to customers.)
  • [2b-3] Oracle acquires Red Hat. (Possible, but not without other large IT vendors jumping in to support Novell SUSE or Ubuntu to ensure that there is more than 1 large IT vendor endorsed/backed Linux distro. No net negative impact to customers.)
  • [2b-4] Decide to fork. (Most unlikely, and this would have a negative impact to customers. But on the other hand, maybe it would increase choice for customers.)

[2c] Red Hat’s financial troubles make it an acquisition target for the likes of IBM, HP, Sun, Dell or even SAP. (Possible, but other major IT vendors would act to ensure that choice of Linux distros remains, so no net negative impact to customers).

[3] The Oracle competition just makes Red Hat work even harder at their core Linux offerings, which is where they’ve shown their ability to compete and win. (Most likely ;-)

Lots of roads this can take. Lots of possibilities, the majority of which don’t have a large negative impact on customers. It’ll be interesting to see this play out.

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I am taking a semi-break from IBM life as I return to finish a PhD in Industrial Engineering. I’ve held roles in market intelligence, strategy and product management. I’m ex-product manager of IBM WAS Community Edition, and blog about enterprise open source topics.

Oracle & Red Hat’s Symbiotic Relationship
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