On the 25th of October 2006 Oracle announced it's 'Oracle Enterprise Linux' program, which essentially takes RedHat's work from RedHat Enterprise Linux and recompiles it to make Oracle Enterprise Linux. This has of course been done before and is perfectly legal. It has been done before for free in the form of CentOS and others. Oracle's main selling point seemed to be a reduction in support costs, though many people pointed out that at the time, this is small potatoes compared to Oracle's massive costs (Enterprise Edition costs $40,000 per CPU), so what was the point?

Recently Mark Shuttleworth was quoted as saying "They are hiring too many people just to deliver patches. My assumption is that they are on track to fork and build their own distribution." Now you have to wonder if they really want to get into distribution race to compete with RedHat and Novell (the most established enterprise players).

Oracle don't have much experience selling operating systems, so, what I think they are doing instead is creating a platform that the Oracle Database and other applications can run on.

I imagine most big companies have local staff that know Oracle and they put it on whatever machines they normally use for that type of thing be that Linux, Solaris, Windows or something else. These companies then have all the staff and infrastructure to maintain it.

In smaller companies, what they do seems less clear to me, they might not have a full time Oracle person or even a systems person. Given these types of failings they might go with something they think they can handle such as Microsoft's SQL server or MySQL.

As an alternative in these smaller companies Oracle could provide a complete software stack with a configured OS, Oracle and management facilities. Oracle could then maintain this system remotely (for a fee) for the company. The advantage of this approach is that Oracle can push their products to anyone who can afford them regardless of what local staffing they have.

The other problem they would avoid with this approach is, trying to get fixes against MS Windows. With Linux they know they can develop a fix in house and push it directly to the customer, if they need to, but with Windows they need to wait on Microsoft to provide a fix which probably takes a long time. Also Microsoft competes with them in the same market so they have no reason to co-operate particularly well. This would not be problem if these small companies were using Linux, but it seems a lot of small businesses use Windows exclusively. If Oracle provides and manages the Linux box, then it can sell to these companies that would otherwise be using Windows, as all the customer needs to know is that it is the Oracle Box and Oracle will fix it if it breaks.

Vertical integration is the term for this I think.