Oracle touts cut-price Red Hat Linux support

Oracle is to sell support to Red Hat Linux customers and offer its own free clone of the open source OS, posing a major competitive challenge to the leading Linux seller.

Oracle chief executive Larry Ellison told thousands of attendees at the Oracle OpenWorld conference in San Francisco: "As of this moment, Oracle is announcing full support for Red Hat Linux. If you are a Red Hat support customer, you can very easily switch from Red Hat support to Oracle support."

Becoming an operating system company is one of a series of bold attempts at growth by Oracle, which in recent years has also acquired small and large rivals. Many major computing companies have embraced Linux but, until now, all have chosen partnerships with Linux companies rather than direct competition.

Ellison argued that customers of Unbreakable Linux 2.0 will enjoy lower costs, better bug fixes and better legal protections than with Red Hat. Software updates cost $99 per server, while technical support costs $399 for a two-processor server and $999 per year for a larger system, he said. And, unlike Red Hat, Oracle will let anyone download the software for free.

Ellison said: "We will backport your bug fixes [to earlier Linux versions]. We will indemnify you from intellectual property problems. And our support costs way less than half of what Red Hat charges."

In after-hours trading, Red Hat's stock plunged 16 per cent, or $3.16, to $19.51, but CEO Matthew Szulik was unfazed by Oracle's move. He said the Linux seller isn't re-evaluating its pricing, its relationship with Oracle, its plans to expand its open source products higher up the software "stack", or its relationship with Oracle rivals.

Dawn Kawamoto writes for CNET News.com