Oracle has been throwing out several hints that it is preparing to offer its own version of Linux and could be working on a partnership with Linux provider Ubuntu.

has been throwing out several hints that it is preparing to offer its own version of Linux and could be working on a partnership with Linux provider Ubuntu.

Rumors of the deal began floating last Friday when Jeffries and Co. analyst Katherine Egbert stated in a report that Ubuntu is working to certify its server operating system to work with all of Oracle’s major products, including its database and middleware.

In case this turns out to be true, Oracle will become the provider of a complete software “stack,” from the operating system to the applications.

That sent Linux distributor Red Hat’s stock tumbling 7 percent last Friday and the stock stayed down through this week. Most recently, it was down 12 percent from last Thursday’s closing of $21.49. Red Hat shares rose a penny to $19.03 in recent trading Wednesday.

Red Hat

Oracle’s stock was up 0.86 percent, rising $0.16 to $18.79 in recent trading Wednesday.

OpenWorld Possibility

Analysts are speculating that Oracle will make the announcement sometime during its upcoming annual OpenWorld conference, which starts next Monday.

Oracle’s possible relationship with Ubuntu, operated by United Kingdom-based Canonical Ltd., could be a result of the fallout from an attempt by Red Hat and Oracle to work together, Ms. Egbert said in her report.

Ubuntu started from an open source community created by South African entrepreneur Mark Shuttleworth. Ubuntu offers free Linux to everyone and gets paid for technical support (see Ubuntu Linux Arrives).

Ubuntu Linux Arrives

Ubuntu officials declined to comment on the reports and so did Oracle.

The possibility of Oracle offering Linux grew last April when CEO Larry Ellison stated that the company would be interested in introducing its own version of the Linux operating system in an interview with Financial Times (see Oracle OS Talk Shakes Industry).

Oracle OS Talk Shakes Industry

He also mentioned at the time that Oracle could be interested in acquiring a Linux provider such as Novell.

Novell

But Global Equities Research analyst Trip Chowdhry said that Oracle would prefer to choose Ubuntu over Novell’s SuSe Linux offering. Novell is an Oracle partner.

“SuSe Linux is having serious stability problems while Ubuntu has a very good stable product,” Mr. Chowdhry said. “You can see Oracle updating or emphasizing Ubuntu Linux at the expense of SuSe Linux.”

Appliance Options

Oracle could be working on a dedicated hardware appliance with a pre-loaded software stack or a soft appliance bundle for the OpenWorld show, Ms. Egbert said in her report.

However, she said that this announcement is not likely to have a large impact on Red Hat’s business.

“A dedicated soft or hard appliance that includes Ubuntu and Oracle’s software is unlikely to be targeted at the core of Red Hat’s market,” she wrote in a research note, pointing out that such an appliance would appeal to small and medium-sized businesses and not the large enterprises that Red Hat targets.

Contact the writer:FBhuta@RedHerring.com

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