Why Larry loves Linux (and he’s not alone)

Fortune ^ | December 19, 2007, 6:00 am | Jon Fortt

[Ernest_at_the_Beach]

If you thought open-source software was a threat to big-company profits, think again.

Just a few years ago, the open-source software movement was a pariah among big software firms. Shai Agassi, then an executive at SAP (SAP), likened it to socialism. Microsoft CEO Steve Ballmer called it a cancer. The attitude among many in the establishment seemed to be that the “free code” revolution led by software such as Linux would discourage invention and erode profits.

That nightmare scenario hasn’t happened. Instead, the open-source movement has helped lower the cost of computing, and fueled a lot of moneymaking innovation, and not just among scrappy startups. For just one example, consider Oracle (ORCL), which is likely to highlight open-source trends as one of the growth drivers in its business when the company reports quarterly earnings today.

How? Last quarter, the business software giant pointed out that its database market share actually tends to improve when customers move to Linux, which has been a fast-growing server operating system for much of the decade. And Oracle is poised to capitalize on open-source trends in other ways. For instance, the company distributes Linux for free, and makes money by offering support.

So far so good: earlier this year CEO Larry Ellison reported that Oracle is in the early stages of selling high-margin Linux support contracts, some for as much as $500,000 a pop. Ellison claims the open-source strategy is also helping to lure database business away from competitors. “We’re just taking share right away from IBM on mainframes and we’re taking share away from Microsoft using Linux,” he told analysts in September.

[Ernest_at_the_Beach]

The Linux love-fest doesn’t stop with Oracle. Google (GOOG), which already uses Linux-based servers to power its search platform, also wants to tap its open-source infrastructure to deliver more and more software over the Internet. (Google’s Android cell phone platform will also be based on Linux.) VMWare (VMW) has long been a Linux-friendly shop.

[Ernest_at_the_Beach]

fyi

[xcamel]

'zactly..

[Incorrigible]

If open source is so great for profits, when is Oracle going to make their database code open source? How about their other software packages? Oracle Financials? Siebel? Peoplsoft? JD Edwards? Hyperion? etc.

No. LINUX is profitable for Oracle because companies are migrating from older database systems on traditional UNIX boxes to Oracle on LINUX; a trend that’s been happening in the UNIX market for years.

[ShadowAce]

[Golden Eagle]

Larry’s just using open source to steal business from Red Hat, by selling an exact duplicate of Red Hat without paying them a dime for it. If Larry actually believed in open source for himself he’d release his own products and allow others to make infinite free copies of Oracle. Of course, he’s much too smart to make that mistake.

[goldstategop]

Open source allows innovation because everyone can contribute to making software work and run better. Every programmer has access to the software's kernel information. Patches and de-bugging can be done in record time. In contrast, closed source software like Microsoft inherently problematic because it relies on proprietary technology and no one knows what problems there are with code apart from those within Microsoft. The result is it takes a long time to discover flaws and bugs in the software. That's where Linux has a decided advantage.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Golden Eagle]

Proprietary software is still hugely dominant in all markets, even though it has a significant cost. Oracle in fact charges extreme fees, but many people pay them instead of using cheap open source knockoffs from Europe like MySQL because Oracle is far and away a better product. Nor is Oracle planning on giving their advantages away for free, they wouldn’t be in the position they’re in if they ever had.

[Señor Zorro]

MySQL is not an "Oracle knockoff". The OSS database system that comes far closer to Oracle is PostgreSQL and, yes, Oracle is better. MySQL's aim has traditionally been low-to-medium load systems that require fast read times more than fast write times (i.e. read operations far outnumber write operations)--often at the expense of integrity and constraints (my biggest beef with it; I want foreign constraints, for example, enforced by default, I don't want to have to switch storage engines to do it). Oracle's target demographic is much larger systems with far more expansive needs. Hence the need for "Oracle DBAs" who are pretty expensive in their own right: Oracle is a non-trivial system to set up and maintain at its peak efficiency.

Nor is Oracle planning on giving their advantages away for free, they wouldn’t be in the position they’re in if they ever had.

Most companies that benefit from OSS do so by releasing their changes to the underlying system (i.e. the kernel, system libraries, miscellaneous general use libraries, etc.) and selling some closed source package, like Oracle, Google (well, they're not really selling a closed source package, but the software running the search engine, GMail and friends remains closed source), Apple, or VMWare. The only kinds of people who are bothered by this are the Richard Stallmans of the world and they, while vocal, are a minority of those who use and write OSS.