Oracle Seeing Red Hat
Oracle (ORCL) has been running roughshod over the enterprise-software world of late, winning gobs of market share by buying up the competition in an $18 billion acquisition spree.
Now it appears that the database giant is gearing up to make a run at a very different sort of enemy: Red Hat (RHAT), the pre-eminent seller of Linux.
Oracle CEO Larry Ellison kicked off speculation about his company's open source aspirations in a published interview in mid-April, in which he said Oracle could well build its own version of Linux. His words put the hurt on Red Hat's shares for a few days, but since then the stock has more than made up for the downturn, appreciating by 12%, while the tech-heavy Nasdaq dropped 1%.
Now there's talk on Wall Street that Oracle may use its annual analyst meeting in July to announce its debut as a Linux provider. Goldman Sachs analyst Rick Sherlund took the possibility seriously enough to publish a 36-page note on the subject this week and convene a conference call with investors and independent Linux experts to discuss the matter.Because so much of Red Hat's software is open source, there's no legal impediment to stop Oracle from building its own version of Linux that would be compatible with, if not a clone of, Red Hat Enterprise Linux, or RHEL. "It is indeed legal for Oracle to take RHEL and redistribute the Linux distribution as Oracle Linux, so long as Oracle removes all protected content (such as Red Hat's trademarked name and logo.)" Sherlund wrote, citing Eben Moglen, a Columbia University professor of law and legal counsel to the Free Software Foundation. Indeed, there already is a number of Red Hat clones on the market, including the popular CentOS. Novell (NOVL), the struggling No. 2 player in the Linux market, has its own version of the operating system that is similar to, but not a clone of, Red Hat's.
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