Oracle steals Yahoo from Red Hat

Oracle has made a "very strong start" with its support programme for users of Red Hat's Enterprise Linux, according to Oracle CEO Larry Ellison.

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Oracle has made a "very strong start" with its support programme for users of Red Hat's Enterprise Linux, according to Oracle CEO Larry Ellison.

Ellison announced the programme back in October at Oracle's OpenWorld conference in San Francisco, but since then the company has declined to comment on the progress of the support offering aimed at both Oracle and non-Oracle users.

"This is just the beginning," he said yesterday (20 March) during a conference call with analysts to discuss Oracle's third-quarter 2007 results. "We're not going to build a Linux business overnight, but we will build it. We're determined to offer the best support in the world."

Ellison said that several third parties will be offering the Oracle Red Hat Linux support including Dell and Hewlett-Packard. Executives from both companies warmly endorsed Oracle Linux in video clips during Ellison's OpenWorld keynote address back in October.

Yahoo was also onstage at OpenWorld. "We have replaced Red Hat at Yahoo as their Linux support supplier," Ellison said. Without naming other customers, he said some of the Linux support deals Oracle is signing are worth over $500,000 (£250,000).

In keeping with tradition, Ellison took advantage of the conference call to attack Oracle's competitors. He claimed that Oracle is growing much faster than BEA Systems on the middleware side and than SAP in the business applications market.

"It took us five years to pass BEA, but we did it," Ellison said, describing Oracle's middleware operation as larger than that of BEA. He also expects Oracle to eventually have a middleware business that's twice the size of the pureplay.

Part of Oracle's strategy to trump SAP, the current number-one seller of enterprise applications, is to focus on selling industry-specific applications to existing Oracle customers, according to Ellison.

Oracle saw particularly strong sales of its industry-specific software in the retail sector, Ellison said, with deals also lining up for its applications focused on the telecommunications and utilities sectors.

Oracle has grown its industry expertise through acquisitions of companies like Retek, Portal and MetaSolv, a trend it plans to continue. "We'll get stronger in the industries we're already strong in," Ellison said "If we can enter other industries in the number-one position and exploit that, we will. We like to buy category leaders."

He then cited the philosophy of former head of General Electric Jack Welch, saying being number one in a market makes it much easier to make money.

Oracle had its fastest-growing third quarter in five years, according to Safra Catz, Oracle co-president and chief financial officer.

Recent rumours suggesting that the quarter had been buoyed up by mega deals of $100 million were "simply not true," she said.

Oracle expects to close its planned $3.3 billion acquisition of business intelligence software vendor Hyperion Solutions in late April, Catz added.

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