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Re: Oracle Explains Move Against Red Hat, Company (Co)founder Returns to Raleigh

On Mar 13, 6:17 pm, Philip <n...@xxxxxxxxxx> wrote:
> Roy Schestowitz wrote:
> > Hash: SHA1

> > Oracle: If RHEL were free, we wouldn't compete

> > ,----[ Quote ]
> > | Now we find out that it's not a question of support at all, but rather that
> > | Oracle simply wants Linux to be free. Why? Because that makes its overpriced
> > | software seem cheaper.

This is one possible explanation.  Another is that Oracle, IBM, SAP,
Seibel, PeopleSoft, and numerous others like having the ability to
have an operating system which allows them to do root cause analysis
down to the lowest possible levels when necessary.  Most of these
companies have their own "give back" programs.  IBM, HP, and Sun have
been supporting Open Source software since the 1980s.  Much of X11,
the Web, SGML and their spin-offs were funded by these companies,
supported by these companies, and the companies even contribute
valuable software.

Bill Joy of Sun WROTE many of the Internet interfaces, including a
number of TCP/IP applications, Sockets, and Model/View/Control object
oriented applications such as "vi".

Many of these companies also contribute CASH to these projects.  Red
Hat, for example gives 50 cents for each paid-for laptop to FSF.  I
don't know about some of the other disbursements.

The problem for Oracle was that they liked Red Hat Linux, and even
offer a number of support packs and plug-ins that help them optimize
the database, but Customers often one "one face" to go to when
something breaks.  Red Hat charges $1500 per processor per year for
support contracts, and corporate customers want a supported version.
The question is whether they pay Red Hat $1500 and then pay Oracle
$10,000 and cut to separate POs, or whether they get one PO and pay
Oracle $12,000, part of which goes to Oracle's support team, and part
of which goes back to Red Hat.

Keep in mind that Red Hat doesn't need to charge Oracle as much per
system because Oracle can handle most of the level 1 and level 2
problems themselves, and only needs Level 3 support for a very small
percentage of the problems.  Even then, Oracle might just do a
contract with Red Hat to get the problem fixed.

Oracle Offers Unbreakable Linux WITH Oracle applications and databases
as a package.  It pretty much means that the customer needs to cut
three checks, one for the hardware, and one for the software, and one
for the consulting and customizations.  They might even offer
outsourced support using on-shore and off-shore resources, for a

There's more profit in the software, but there's more revenue in the
consulting, support, services, and operations.

Back in the old days, IBM would sell you a few Mainframes for $5
million each (1980s money) and do whatever it took to keep those
machines running for a few years.  They also offered financing to
spread out the financial pressure and work better with your cash-
flow.  The $5 million was usually way more than enough to cover all
but the worst possible scenarios, and the average was sufficient to
cover all of the risk profitably.

These days, we see PCs running $400 each, that have hundreds of times
more memory, power, and bandwidth than those old mainframes.  The
SUPPORT for those PCs can cost over $1500/user/year.  And those are
just DIRECT costs.  When running lots of complex software on "thick
client" applications, the costs in secondary costs such as lost time,
lost work, lost productivity, and lost business, can soar as high as

Switching to server based applications, making the local PC simpler
making it do less, and shifting some of that load to servers, web
services, and enterprise applications with browser or Web 2.0
applications makes reduces costs in the long run.

The only problem is that if a server goes bozo, it could sideline
1,000 people for as long as it's down.  Normally, both Windows and
Linux implementations use redundancy, load balancing, and automated
fail-over to make sure that the overall "system" is only down for a
few seconds or less, even though some Windows servers might be down as
much as 10% of the time (including scheduled maintenance, scheduled
outages, and other items excluded from Microsoft's availability

Oracle knows that making Linux "indestructable" means that the clients
don't need to buy as many servers, which means lower staffing costs,
which means savings over "lots of itty bitty Windows boxes".

> > | At least Oracle is being honest now. Coekaerts' argument is cheeky, but it
> > | makes strategic sense for Oracle. It just makes no financial sense for Red
> > | Hat.

I doubt that Larry Ellison would quite agree with everything that
Coekaerts said
in that interview.  It may not have quite been the "party line".

> >http://news.cnet.com/8301-13505_3-10194650-16.html

> Sounds as if Oracle like having it both ways. Closed source crummy RDBMS
> with crummy support and nearly free OS with their same signature crummy
> support.

Oracle sells far more than just the RDBMS these days.  They offer
Financials that
provide compliance with various regulatory agencies - not something
you get with
the "Freebie" version of mySQL.

Oracle offers workflow to integrate various servers using tools that
go directly from
diagram to implemented code.  Draw the picture, get the working
system, in very
short time.  Not something that comes with PERL.

Even their database comes with tools that let you go from ERD and
to optimized database implementation in relatively few steps.  Again,
not something
you'd get with PostGreSQL.

Again, customers have the option of buying a small assortment of cheap
that has to be stitched together from "one size fits all" components,
using $200/hour
labor who understand the compliance issues AND can code in low-level
java, and spend
$10 million or maybe triple that, getting the code done by hand.

Or they can pay $50,000 for software that lets $400/hour consultants
get the job done
for $4 million.

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