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Egbert predicted in a recent note that if Oracle decides to not only support Sun's Solaris operating system, but promote it as an alternative to Red Hat Enterprise Linux, then Red Hat may be forced to seek a hardware partner: "It seems inevitable Oracle will favor Solaris. While Oracle has said publicly they will continue support of RHEL, there is a sense within Red Hat that an increased focus on Open Solaris over RHEL is inevitable, as Oracle seeks to protect the declining Solaris maintenance stream. We estimate that 1/3 of Red Hat's new business comes from Unix-to-Linux migrations. The danger to Red Hat is that Oracle will offer customers attractive terms terms to stay on Solaris, potentially even paying them not to migrate." The logic of Oracle supporting Solaris is pretty sound, given the rationale behind Oracle's purchase of Sun is to secure a hardware channel for its software. So, why wouldn't Oracle want to own the whole pie: hardware, operating system, applications and coding environments? Letting Solaris wither on the vine seems anathema to the benefits of the deal. In fact Oracle has already been trying for two years to extricate itself from the Red Hat relationship in the form of its own Linux distribution, called Oracle Unbreakable Linux, but has had limited success. And given the market's preference of using Red Hat's operating system with Oracle's software, as well as Oracle's possible two-pronged offensive of offering customers Solaris or Unbreakable Linux, Red Hat could face a serious problem in a few years when the economy recovers and companies begin to reassess their information technology needs and possibly turn to Oracle for everything. So if Oracle kicks Red Hat to the curb, who would be the company's white knight? Egbert suggets IBM Corp. (NYSE:IBM) as the likely buyer. Given IBM's earlier attempt to buy Sun to secure its Java programming language, Red Hat with its JBoss alternative to Java seems like a decent consolation prize -- not to mention a cheaper alternative considering Red Hat's $3.58 billion market cap based on Wednesday's market close of $18.93 a share. - Matthew Wurtzel See story from WRAL's LocalTechWire.com
CategoriesComments
From: Jerry,
JBoss isn't an alternative to Java. JBoss is written in Java...it's an application server that is an open-source alternative to Oracle/BEA's WebLogic app server as well as IBM's WebSphere. There were talks of Oracle buying Red Hat at one point. Right now, that would likely face anti-trust issues.
Posted on:
May 22, 2009 2:10 PM
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Jefferies & Co. analyst Katherine Egbert believes Red Hat Inc. (NYSE:RHT) is a likely takeover candidate, especially following Oracle Corp.'s (NASDAQ:ORCL) $7 billion purchase of Sun Microsystems Inc. (NASDAQ:JAVA). 
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Hello! Red Hat is 8X as expensive as Sun when you look at price-per-sales. Sun is cheap, cheap, cheap, cheap. Red Hat is quite expensive and getting more expensive every day.