Welcome!

Linux Containers Authors: XebiaLabs Blog, Elizabeth White, Lori MacVittie, Liz McMillan, Miska Kaipiainen

Related Topics: Recurring Revenue, Linux Containers, Open Source Cloud

Recurring Revenue: Article

Oracle Linux – Novell or Red Hat? (Hopefully Neither!)

"Spending good money to get into other rapidly commoditizing businesses... seems a waste"

Yesterday morning saw reports in the Financial Times that "Oracle considers venturing into Linux". This was picked up by CNet (via Reuters) which set up the discussion about Oracle's desire to deliver a entire stack of technology to customers, and then drew attention to the quote that Oracle has even "considered buying Novell." And thus are rumor mills fed. Let's actually look at the discussion in a business context:

In an interview with the Financial Times, Larry Ellison said that Oracle wanted to sell a full “stack” of software that, ... included both operating system and applications. “I’d like to have a complete stack,” he said. “We’re missing an operating system. You could argue that it makes a lot of sense for us to look at distributing and supporting Linux.”

Not an unreasonable opinion. Go all the way back to Geoff Moore and Crossing the Chasm (1991). You want to present a "whole product" solution to your customer, i.e. your core revenue driver and all the complements you can reasonably provide that your customer perceives as the complete solution to their problem. If to sell an Oracle "solution" today means Oracle licenses and Oracle vertical specific applications, AND an expensive operating system on expensive hardware, AND an expensive application server, then reducing the overall cost to the customer while driving the core revenue generators would seem to be A Good Idea.

As part of a recent study of the open source software market, Mr Ellison said that Oracle had considered buying Novell, which after Red Hat is the biggest distributor of Linux. “We look at everything, play this thing out,” he added.

This statement should not surprise anyone that has worked in a large enterprise with a view of the executive offices. Companies explore ideas on paper constantly in their corporate/business development offices. Lot's of "what if" scenarios are played out, and numbers crunched without anyone ever committing to doing something. Companies even pay good money to the McKinsey's of the world for this sort of analysis even if they have their own inhouse "business consulting team". I'm sure Oracle has also run the numbers on Red Hat and SuSE (before the Novell acquisition) and developing their own distribution at various times in the past, and will do so again.

“Now that Red Hat ... competes with us in middleware, we have to re-look at the relationship – so does IBM,” he said.

This last quote is the troublesome one (or maybe it's a misquote without context). Oracle is the enterprise relational database company. It's been expanding its brand with vertical specific Oracle applications. It needs middleware (i.e. an app server), like it needs an operating system on which to run, but it isn't a middleware company.

Go back to the original business goal expressed in the article, that Ellison wants to provide a complete stack or solution to his customer. Good idea, but he has better ways to spend shareholder dollars to solve customer problems than acquiring the stack outright, and then living with the cultural consequences and long term engineering expenses of becoming an "operating system company" and an "app server company" as well as their primary focus as the enterprise database company. Spending good money to get into other rapidly commoditizing businesses, rather than serving your customers needs by supporting companies like Red Hat with its JBoss acquisition that already know how to make money in a different margin business seems a waste.

As I suggested Friday, Oracle should be hammering down Red Hat's door to expand the relationship with all the money they saved by not acquiring JBoss, or in this case (hopefully) Novell.

More Stories By Stephen Walli

Stephen Walli is Vice President of Open Source Development Strategy, Optaros, where he's responsible for developing and managing Optaros' relationships with the open source community. Previously Stephen was an advocate for open source at Microsoft, where he was focused on the technical implementation of open source-related community projects, creating a business model at Microsoft to engage in the open source community. Stephen was the Vice-president, R&D and a founder at Softway Systems, Inc, the developer of the Interix environment to re-host UNIX applications on NT. Stephen was also an independent consultant for X/Open, Sun, UNISYS, and the Canadian government. He was once a development manager at Mortice Kern Systems, and a systems analyst at EDS. A long time participant and officer at the IEEE and ISO POSIX standards groups, representing both USENIX and EUUG, he blogs on open source, standards, and the business of software at http://stephesblog.blogs.com/

Comments (2) View Comments

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Most Recent Comments
Karsten Silz 04/20/06 08:59:05 PM EDT

I don't think that Oracle is a pure database company anymore. If you look at their financial results then you see that revenue from databases and middleware together grew five percent last quarter - kinda saturated, and threatened at the lower end from open source (MySQL, Tomcat, JBoss). So for a couple of years, Oracle grew their enterprise application business aggressively (see the take-overs of Siebel and PeopleSoft) and uses their database and the app / portal server their as the infrastructure technology. Pretty smart, if you ask me - that business grew 77% last quarter, although that number is caused by the acquisitions. Anyway, if you look at Oracle as an enterprise application company, then it makes sense to also offer an operating system, especially Linux, because each Linux license is one less Windows license sold. However, SAP became the biggest enterprise application vendor with an operating system, so it is not required per se.

Redge 04/18/06 09:25:08 AM EDT

Oracle is a public company like Red Hat so their primary goal is to make money. They will buy Novell. They wont spend extra dollars making their own stack from scratch. These so called Open Source companies will just canabelize themsleves as the GNU contracted media remains to pick up the pieces.

@ThingsExpo Stories
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, will compare the Jevons Paradox to modern-day enterprise IT, e...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
If you had a chance to enter on the ground level of the largest e-commerce market in the world – would you? China is the world’s most populated country with the second largest economy and the world’s fastest growing market. It is estimated that by 2018 the Chinese market will be reaching over $30 billion in gaming revenue alone. Admittedly for a foreign company, doing business in China can be challenging. Often changing laws, administrative regulations and the often inscrutable Chinese Interne...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...