This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Oracle Seeing Red Hat

Oracle (ORCL - Get Report) 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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
IBM $169.78 0.00%
MSFT $47.87 0.00%
ORCL $43.08 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs