I'm usually not one for bashing analysts, but a recent report from Jefferies & Co. -- which suggests that Oracle
My problem isn't with analyst Katherine Egbert's sources, or her conclusion that Oracle is talking with the makers of Ubuntu Linux about working more closely together. My problem is that she believes the collaboration could result in an Oracle-branded Linux appliance. Frankly, I think that's crazy.
Oracle has built a thriving network of third parties that help it to deliver software. Server makers such as Sun Microsystems
More likely to me is Egbert's second thesis, which says that Oracle could bundle Ubuntu Linux in a stack of software designed to run on any server. Doing so would provide a fast track to Oracle applications for small businesses and, at the same time, obviate the need for infrastructure software from Red Hat
And yet I find even this scenario somewhat difficult to believe. Ellison has long been known for veiled threats, and I think that's what we have here. Why? Threats don't cost much and Oracle has a lot to lose -- 80% of the Linux database market at last count. That means his company has to work with Ubuntu whether it wants to or not. If, in doing so, Larry wants to make Red Hat or SuSE a little nervous, great.
Besides, it's practical for Oracle to have alternatives. Red Hat is amassing a formidable software stack of its own, thanks to the acquisition of the JBoss application server. And Red Hat probably has enough capital to purchase the MySQL open-source database and go head to head with Oracle any time it wants. Ellison would hate to see that occur.
The harsh truth for both Oracle and Red Hat is that they need each other in a world that's otherwise dominated by Microsoft
A database of related Foolishness waits:
- What's the big deal with Larry's bonus?
- Watch Oracle flex its financial muscles ...
- ... And deliver in Q1.
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Fool contributor Tim Beyers owns shares of Oracle. He's also long the stock in Motley Fool CAPS , our new service where Fools collaborate to rate thousands of stocks. Get in the game today. And to get the skinny on all the stocks in Tim's portfolio, check his Fool profile . Microsoft is an Inside Value pick. The Motley Fool's disclosure policy sees all.