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Red Hat and Oracle - the beginning of the end?
April 21, 2006

Red Hat's chief exec, Matthew Szulik, has responded to Oracle chief Larry Ellison's suggestions that the company might - or might not - acquire its way into the Linux business, comparing the US software industry to the US auto industry and accusing the proprietary software model of failing to serve its customers.

Szulik was responding to an interview Ellison gave to the FT in which he stated that "it makes a lot of sense for us to look at distributing and supporting Linux". Ellison then went on to explain why the company was unlikely to acquire its way into the Linux business, as I've already mentioned here but Szulik has responded to the potential in any case.

Via a letter to the FT he welcomes "more public contribution from the large proprietary software industry" but accuses that industry of failing to serve its customers.

"I believe the technology industry has entered an era where the customer, an asset taken for granted by many technology companies during the past 30 years, has moved front and centre in the internet. The absence of lock-in due to open source software has created a new competitive period where innovation and value added replaces the lack of alternative created by the proprietary walled gardens of software vendors," he writes.

"I have a much better appreciation of the challenges the Japanese carmakers faced when attempting to break into the domestic US market while competing against historical industry practices and the personal networks that stood in the way of customers having access to a lower-cost, higher-value alternative.

"Open source software and Red Hat continue to face similar challenges. But in the end, through innovation and a commitment to the customer, the Japanese automakers delivered choice to the customer. The US automotive industry is a good case study, in comparison to the state of the domestic US software industry," he continues.

"Open versus closed. Collaborative versus proprietary. Independent versus exclusive. The customer wants to pay for value delivered. Red Hat represents, to a worldwide network of software developers, a value that is not for sale - the freedom to choose."

Szulik also questions the timing of Ellison's comments, coming so quickly after Red Hat's announcement that it was acquiring open source middleware vendor JBoss. "Is it possible that the dominant provider of databases feels pressure from its long-time partner, Red Hat, because of our recent purchase…?" he asks.

Some commentators had wondered how Red Hat's acquisition of JBoss would impact its relationship with the likes of IBM and Oracle. If the recent exchange is anything to go by it appears that the fall-out will not only not be pretty, but may also be very public.

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Posted by Matthew Aslett on April 21, 2006 12:09 PM

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