Oracle and Unbreakable Linux II

I'm back from LWE UK and have had some more time to think about this. First, I still think Novell was the biggest loser here, not Red Hat. As Unbreakable Linux is basically a RHEL clone, it has further validated RHEL as the Enterprise “standard”. I think that will likely make selling non-RHEL solutions more difficult. Novell is going to have to be really compelling to get business now. I had wondered if Red Hat would lower prices in response to the Oracle move, but CEO Matthew Szulik has gone on record as saying they will not. We'll see if they keep that stance over the next two quarters or so. I also still feel that Red Hat should bring back an “updates only” product in the price range of $40-60/year/server back. They really lost a lot of fans and goodwill when they dropped RHL, but I think if the pitch is right many of them would come back. While RHEL is nice, it's out of the price range of many SMB's. If I were Red Hat that's not a market I would want to let another Linux company get a solid footing in (as of now no Linux company has any really dominance in this space). I think it's also a product that could sell well against Vista.
With the history Oracle has, one has to wonder if one of the main objectives for this announcement was to tank the Red hat stock price and make it an attractive acquisition target. The stock indeed tanked 25% on the news, but has been slowly chipping its way back up. Red Hat has announced a $325 million stock buy back as a result. If Oracle is in the Linux distro business for the long haul, you have to wonder how much penetration they can get from outside current customers. While this is a profitable segment for RHAT, it's certainly no death knell. Oracle seems to have put themselves in an odd position. If they do gain wild success they will end up losing the base of their own product. I'd guess that's a result of this being an emotional reaction to the Red Hat JBoss acquisition and not a well thought out business decision. An Oracle “appliance” that came with RHEL and Oracle preinstalled with support for the entire thing by Oracle would have been a much better solution IMHO, but that's just not Larry's style.
–jeremy
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