Red Hat CEO suggests Oracle is feeling the heat

Rob writes "The previously rosy relationship between Oracle Corp and Red Hat Inc appears to have soured following Red Hat's acquisition of JBoss Inc and Oracle CEO Larry Ellison's suggestion that his company could move into the Linux business. Red Hat's chief executive, Matthew Szulik, has written in response to a recent interview with Ellison in which Ellison suggested the company would be interested in distributing and supporting Linux. "Is it possible that the dominant provider of databases feels pressure from its long-time partner, Red Hat, because of our recent purchase of an open source middleware company, JBoss?" Szulik asked, although he also played down suggestions of a "showdown" between the two companies."

Comments

Link to the actual letter.

[Whiney Mac Fanboy]

If anyone feels like reading the actual letter Szulik sent to the Financial Times, they can read it here.

There is also a no-reg-required mirror at the zimbabwe open source software society.

The most intersting part of the letter is where szulik puts a new twist on the (always perfect) car / computer analogy

I have a much better appreciation of the challenges the Japanese carmakers faced when attempting to break into the domestic US market while competing against historical industry practices and the personal networks that stood in the way of customers having access to a lower-cost, higher-value alternative. Open source software and Red Hat continue to face similar challenges. But in the end, through innovation and a commitment to the customer, the Japanese automakers delivered choice to the customer. The US automotive industry is a good case study, in comparison to the state of the domestic US software industry.

Well put.

Showdown? lol

[Toby The Economist]

Oracle could swallow Redhat without even needing a context switch.

Re:Showdown? lol

[Jason Earl]

There's a funny thing about market economies. The market produces what people have shown an interest in paying money for. If Oracle were to buy Red Hat with the intention of shutting Red Hat down, then you can basically guarantee that several other "Enterprise" Linux distributions would spring up as if by magic. This is especially true if Oracle paid current market prices for Red Hat. The source code in question would still be available, and there would be a large community looking for a new home.

In the long run Oracle is likely to have the same problems as Sun. Like Sun, Oracle's real problem is that Red Hat offers a software stack that is competitive with Oracle's software stack while maintaining an R&D budget that is a couple orders of magnitude smaller than Oracle's budget. Oracle's size is precisely the problem. As commodity software becomes more and more widespread the ridiculous profit margins that Oracle needs to survive will get harder and harder to produce. Sure, there are lots of Oracle customers that can't really afford to move to a lower cost but less featureful software stack, but Oracle is going to find that an increasing number of its customers are unwilling to pay for features that they don't really need or use. Lots of technical folks get all excited about "Enterprise" software, but in the long run inexpensive commodity software that actually gets used tends to move up the technology stack and crowd out software that relies on the huge profit margins that can be found at the high end of the spectrum. Red Hat's cost structure is designed around taking advantage of the much lower profit margins associated with commodity Free Software. Oracle's cost structure, on the other hand, is designed around the much higher profit margins that Oracle has historically been able to squeeze out of the market. Oracle can pretend that it can compete with Red Hat, but really it can't, not without shedding a lot of its workforce. If Oracle were to lower its workforce so that it was competitive with Red Hat then customers that are currently paying huge margins for Oracle products and services would undoubtedly take their business elsewhere.

Windbags

[Billosaur]

While not exactly a declaration of hostility, the letter is provocative given the change in relationship between Red Hat and Oracle noted by Goldman Sachs. Ellison had the first words with his statement that "they're not supporting the customers very well," now Szulik has responded.

And so the pissing contest begins. Why? Of what possible use is it? None. Look, Oracle wants in to the Linux market, so it can compete both within the open source arena and have a chance at digging into Microsoft's market share. I've said repeatedly this move is about 5 years overdue. Since it appears Oracle is not interested in Red Hat or Novell (I said appears; never let it be said Ellison couldn't change his mind in a heartbeat), they'll go after someone else, like Ubuntu. This doesn't stand to hurt Red Hat or Novell; any Linux distribution they swallow up is going to end up having its creativity choked off by the bloated development structure that is Oracle.

Move along -- nothing to care about here. We'll see how it pans out in the marketplace when and if Oracle takes the plunge. Sabre rattling at this point is just silly.

Re:Windbags

[SeeMyNuts!]

"Of what possible use is it?"

These things at least get decision makers to stop for a moment and have "Oracle" or "Red Hat" enter their thought stream.

mysql?

[NynexNinja]

I really don't think Redhat or Jboss has anything to do with Oracle or any pressure that might be put on them forcing change in their business. If anything, MySQL is largely responsible for this... When you have a database that a) is faster than Oracle and b) supports all the features of Oracle and c) can be clustered easier than Oracle and best of all d) it does not cost $200,000 per copy. I would be concerned too.. Their market share is fading away. I think Redhat is only referencing this to make themselves feel like part of the game, when in fact I'm not sure that they are even involved in any of this. Does Redhat write database server software? Not the last time I checked...

Re:mysql?

[adolfojp]

MySQL and Oracle are two different products aimed at two very different markets.

While MySQL will be more than enough for many uses, there are some situations where using it instead of something like Oracle is irresponsible, if not downright criminal.

Saying that MySQL can compete with Oracle in terms of speed, features, and clustering capabilities is an argument that is not grounded in reality.

Re:mysql?

[fireboy1919]

Umm...nobody who uses databases ever claims B). On the constrary: MySQL has less features than most of the database engines out there.

However, nobody cares about most of the extra features. So let's change B) to: supports all of the features of Oracle that most people care about

Did you know that Oracle comes with something to do a text search on almost any document type, including those accessible through URLs? And that you can do fuzzy searches based on that, and that the database can learn to give better results via an expert system? It's a pretty nice search engine. Does MySQL come with a search engine?

Also, if I've said it once, I've said it a million times: don't exaggerate. The personal use version is free, and Oracle is $5k per copy for the one-processor, coarse-grained security model. The high-end one for clustering that you seem to be thinking of is $40k, not $200k.

My guess is that the market share of stupid people who buy Oracle when all they need is MySQL is dying. However, there really are people who want to do extremely sophisticated stuff that only Oracle is providing. Oracle's real up-and-coming competition for their real market is Google, I think.

If Google will do all the indexing and does a better job of managing your data without you having to even configure it, then why should you manage it with Oracle?

Re:mysql?

[kpharmer]

Ugh, you're unfortunately wrong on just about every account:

> a) is faster than Oracle

The only situation that mysql can beat oracle in is probably highly-indexed read-mostly content management use with its caching front-end. In reporting read-only environments mysql's lack of parallelism & partitioning means that Oracle can easily be *40x* the speed of mysql.

> b) supports all the features of Oracle

Don't even know where to start on this one. MySQL doesn't even support all the features of Postgresql yet, let alone Oracle. Of course, that's ok - nobody says that it needs to support all of the features. But it doesn't, and that means that there are plenty of uses for oracle that won't work well for MySQL. For example: financial auditing regulations and increasing government security requirements are driving quite a bit of features in oracle. It has extensive capabilities here that are completely missing in mysql. That are required for many applications in these industries.

> can be clustered easier than Oracle

wait, you mean to compare the mysql cluster that requires all data to fit into memory with Oracle RAC? Well, sure - Oracle's cluster set up is more complex. Then again it solves general real-world problems of uptime with zero data loss. The MySQL solution is only useful for a small niche of databases (tiny data volumes that can afford to lose data).

> it does not cost $200,000 per copy

yeah, neither does Oracle. Which can be free for small databases, can cost a few thousand for something a little bigger, can cost what? $32-40k list / CPU at the high-side. And probably $60k/CPU if you want some additional features. Sure that's a ton of cash, but that's list - with frequent 50% discounts and isn't $200,000 / copy.

> If anything, MySQL is largely responsible for this

No, i think jboss is responsible for this. It will compete directly with oracle application servers.

> Their market share is fading away.

Yeah, eventually. Eventually, Postgresql/MySQL/etc will be fast enough, have enough features, secure enough, etc. By that time Postgresql will still be free, who know's what the mysql licensing will look like. Or what storage engine they'll be migrating users to, or if oracle will own them.

Everything old is new again

[vallee]

The thing is, this affair of Oracle considering entering the Linux support arena and even shipping its own Linux distro is not new. Not even close.

It dates from 1998, during the initial launch of Oracle 8i. Since then, and arguably for even longer, Oracle has had a consistent strategy of undermining the role of the operating system by taking on more and more of the critical duties into its own code base. Linux plays into this strategy marvelously well. Except, here's the rub. Redhat is not interested in the furtherance of this agenda. Redhat wants the operating system to remain a key part of the enterprise IT infrastructure.

I wrote an interesting article on my blog titled "Oracle & Linux, Ancient History" on this subject last week, and the article links to the web archive of my original post about Oracle and Linux and Oracle's strategy to undermine the OS from 1998. The original article's title was "Why Oracle 8i Will Remodel the OS Landscape" and ultimately what we're seeing now in the tension between Oracle and Redhat is the materialization of Oracle's vision of the operating systems' role chafing on its longstanding partner.

Cheers,
Paul
P.S. Pythian DBAs post on our group blog at http://www.pythian.com/blogs/.

Good idea for Oracle

[Bert64]

It would make a lot of sense for Oracle to produce a complete dedicated package that didn't require an OS already be installed. Most Oracle database systems are dedicated machines anyway, so having the entire package supported by a single vendor instead does make a lot of sense. No more Database vendor blaming the OS vendor :)

Re:Good idea for Oracle

[WinterSolstice]

That'd be nice, except that with IBM DB2 on IBM AIX running on IBM RS/6000 systems, they still point fingers. I have repeatedly been forced (as a customer) to make different divisions within IBM talk to each other. It would seem to be good, but it really is almost the same.

-WS

Re:Good idea for Oracle

[DavidpFitz]

It would make a lot of sense for Oracle to produce a complete dedicated package that didn't require an OS already be installed. Most Oracle database systems are dedicated machines anyway, so having the entire package supported by a single vendor instead does make a lot of sense. No more Database vendor blaming the OS vendor :)

Funnily enough, Oracle did this with the Oracle Appliance for 8i and 9i. They never made an Oracle 10g appliance. It was exactly as you outline above - it's a preconfigured software stack to run Oracle. Everything already set up in a basic form. Made life very easy when needing to test a DB agnostic app against Oracle.

Oracle have since removed reference to it from their site.

Re:Good idea for Oracle

[P3NIS_CLEAVER]

I would agree 100%. I think linux distros will just be another tool that enterprise vendors will be obligated to provide as part of their whole solutions.
I wouldn't be suprised if Microsoft does this to remain competative.

Re:Nothing to worry about?

[2names]

Eh Hem...

It's Mimosa, and they are served with Brunch, you ghastly heathen. :)

What does Oracle want and what does Oracle need?

[ahmusch]

Oracle wants an OS that runs on commodity (x86) hardware, so that it can publish a virtual machine with Oracle preconfigured. (Reference the Oracle appliance of days of yore.)

Why?

Because virtualization is hot in databases. Having lots of servers spinning idle that you may need (and paying Oracle for the privilege) is costly, and Larry sees market share, well, if not eroding, then certainly being nibbled at. By shipping a distro with Oracle preconfigured, he:

1. Shows a commitment to his customers for a lower TCO. (Remember, the amount of time the IT staff spends installing and working through issues with the software stack counts.)
2. Punches SQL Server in the mouth.
3. Takes more control of his destiny by being able to more effectively tune the OS for database tasks, yielding better performance and price-performance in things like TPC-C and TPC-H.

Oracle needs to use a Linux distro that has traction within the data center, and in the US, that's either Novell (SuSE) or Red Hat. Those are the only distros officially supported by Oracle now, which probably helps to explain their traction within the data center.

Oracle will buy one. It's just a matter of which one.

And if I were RedHat's CEO, I'd be really careful pissing off Larry. It's not like Larry's afraid to, I don't know, buy your company so he can fire your ass. *cough*Siebel*cough*

Re:Linux Success Puts It in Oracle's Crosshairs

[PCM2]

Already last fall, one might theorize that Oracle Corp. had decided it had been feeding Linux enough, and that it should start watering some other ecosystems: Oracle Selects Solaris as preferred OS

Oh please, that was so obviously a bone thrown to Sun. I'm sure it was not done without some consideration given by Sun to Oracle. Plus, it's easy to announce that Solaris is your preferred OS when ... well ... Solaris is your preferred OS. The market for Oracle boxes running on Linux is growing rapidly and may overtake those running Solaris in the near future, but it hasn't yet. More people still run Oracle on Solaris than any other OS, last I heard.