Red Hat executives are putting on a brave face and looking at Oracles Unbreakable Linux announcement as a positive for them, saying it is an acknowledgement that the future of software is open source and that its Enterprise Linux software is the gold standard.
Oracle on Oct. 25 announced that it will provide the same enterprise-class support for Linux as it provides for its database, middleware and applications products.
Essentially, this means that Oracle, after removing Red Hat trademarks, will be distributing Oracle Unbreakable Linux, derived from Red Hats open-source Linux technology.
"It would certainly have been easier had they not made this announcement, but there are a lot of things that actually will be positive for us," Tim Yeaton, Red Hats senior vice president and general manager of its products division, told eWEEK.
"We do not think it is at all true that the move could put us out of business and we think it supports the model behind the way we have built our business."
The company has already started reaching out to its investors and business partners to convey its point of view about this development and its impact on the company, and they have all been supportive so far, he said.
It will continue to do this going forward, and will also be reaching out to customers through its sales force, Yeaton said.
"We feel very confident that nothing changes for us strategically. There are certainly some issues and assumptions made in Oracles model that was inconsistent with how our model really works that we have corrected on our Web site," he said.
There are also some complexities to the model put forward by Oracle that will not be easy for customers in practice, and Red Hat believes strongly that it will continue to service the large group of its customers who have a dependency on Oracle, he said.
The company will also not deviate from its core mission to build out an end-to-end open-source platform, Yeaton said.
With regard to the competitive aspect of Oracles move, Yeaton said Red Hat believes "most strongly" that the move creates a significant expansion of the market opportunity in the long term.
"Competition means choice, and choice has been one of our key mantras. We are also in an industry where coopetition is common," he said.
But those in the proprietary software business see it differently.
"I guess the drawback of having to make your source code available is that anyone can come across and start a business on it, including a services business," a source who asked not to be named told eWEEK.
Yeaton begs to differ. "The fact that customers now understand that the future platform direction is Linux and open source is likely to accelerate the movement of old Unix-based applications to Linux, which will be the tangible evidence we will see of market expansion and acceleration," he said.
That means that Red Hat would have to continue to drive innovation, deliver high quality services and support and add value—things that have always been part of its strategy, he noted.
Asked if Red Hat would lower its prices given that Oracle is offering its Unbreakable Linux program for substantially less than Red Hat currently charges for its best support, Yeaton said that while Red Hat feels very confident about its subscription offerings, it will be looking at this to see if changes were necessary.
But support pricing is not really relevant given how customers buy products, he said, adding that the comparable cost of components in an Oracle offering more than offset any difference in support pricing between them.
Customers do not typically just buy the operating system, they buy a set of elements that build out the platform, and then the solutions above that. "In the pricing context, think of the application stack we recently announced for under $2,000," Yeaton said.