Breakable Linux

Speculation, rumors and a 25% drop in a market cap sure has captured the minds of the business and technology press this week around Oracle and Red Hat. It's interesting to see so much banter about Larry's bravado and the “beginning of the end” for the Linux/Open Source darling.

Naturally, this announcement has spurred dialog internally as well. Below, in an email excerpt from one of my bosses Rich Green, he articulates the issues facing companies who use open source to make a profit but don't actively contribute back into the project. Rich makes some important points that I have seen seriously impact a number of companies in the Linux/OSS world.

From both a Red Hat and Oracle perspective, this announcement illustrates the questionable nature of an economic model based on the support of technology that you have not created. There is not a differentiate-able advantage in offering services in an area in which you have no defensible position based on subject matter expertise. It is not a competitive differentiator to sell support licenses, take calls from customers, and solicit contributions from the wide field of Linux open source developers who DO have the expertise to address customer problems.

Thus, this establishes the pattern of a downward spiral of profits based on such a flawed model.

From a customer's perspective, this margin pressure is a surrogate indicator of the risk of basing solutions on a product or technology that cannot be supported at a predictable rate—because of the separation of the support organization from the creators of the IP—and thus putting all programs that require predictable and reliable solutions at risk.

We're the only organization in the OS industry that combines a full open-source license and availability of technology with the in-house expertise to provide predictable and reliable service and support. Notwithstanding the technical superiority, wider range of supported platforms and more extensive list of ISVs, from a financial perspective, our in-house expertise provides a competitive and defensible advantage.

In regard to the arguments cited above, I am hesitant to join the fray of such a questionable business model. I would rather consider directing all of the investment in such a program to Solaris adoption activities.

Whether it's the vulnerability of the Red Hat/Oracle model or just the uncertainty that the Oracle move has caused for Red Hat in the market, this is the clearest reason for customers to see that Solaris is the strategic choice as they move forward with their OS plans for the future. I mean, let's face it:

• Solaris is open.
• Solaris runs on more than 750 different hardware platforms including Dell, HP and IBM to name a few.
• Sun and the community continue to innovate around areas that are most critical to customers.

I should also mention that Oracle breaks world records running on Solaris, which I think is a lot better for the customer than Oracle breaking Linux.

Posted at 09:43AM Oct 27, 2006 by Peder Ulander in Sun  |