Open Source Weblog

The potential for Oracle to launch a Linux distribution or support business is becoming a millstone around Red Hat's neck. It's share price also took a kicking last month as it reported lower than hoped for net income due to tax and compensation charges.

That, combined with investor concerns about Oracle's Linux potential, according to BusinessWeek, was enough to push Red Hat's share price below $20 for the first time since October 2005, despite the company reporting revenue for the second quarter up 52% from the same quarter last year to just shy of $100m.

We've written enough about Oracle's intentions with regards to Linux since Oracle was linked with an open source spending spree (see also here, here, here, here, and here).

You could speculate all you like about how and why Oracle might enter the Linux business and what impact it might have on Red Hat.

Interestingly, Jefferies seems to think it will base its move on Ubuntu, either via a hardware appliance (which it has tried before) or a soft appliance bundle.

While we think it's entirely possible Oracle might enter the Linux business, Ellison is not exactly shy about putting the cat amongst the pigeons and we'll believe it when we see it.

In the meantime, it's amusing to see Jefferies "caution against a knee-jerk reaction" while lowering its target from $24 to $21.

Anyway, Red Hat has its own issues to deal with, and if I were a shareholder I'd be more concerned with it's performance at acquiring and integrating JBoss than I would about what Oracle might or might not be doing.

In fact, when it comes to acquisitions, perhaps Red Hat (and other) can learn from Oracle.

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