Update: Oracle eyes launching its own Linux version

Reuters - Oracle Corp. is considering launching a version of the Linux operating system and has looked at buying one of the two firms dominating the technology, the Financial Times reported today.

The report, citing an interview with Oracle CEO Larry Ellison, said the move would redraw the software landscape and open a new front in Oracle's long rivalry with U.S. rival Microsoft Corp.

Ellison told the newspaper that Oracle wanted to sell a full range of software that, like Microsoft, includes both operating systems and applications.

"I'd like to have a complete stack," Ellison told the paper. "We're missing an operating system. You could argue that it makes a lot of sense for us to look at distributing and supporting Linux."

The report said that like IBM, Oracle has counted on Linux -- an open--source system whose code is open to anyone to view and adapt -- to act as a counterweight to Microsoft's Windows, which has expanded rapidly from desktop PCs into corporate IT systems.

As part of a recent study of the open-source software market, Ellison told the newspaper that Oracle had considered buying Novell Inc., which is the biggest distributor of Linux after Red Hat Inc.

An Oracle spokesperson confirmed the comments made to the Financial Times but declined to elaborate. Novell, through a spokesman, declined to comment.

An Oracle acquisition of Novell would be good for users, said Brent Biernat, director of network services for COCC, an Avon, Conn. provider of technology services to community banks and credit unions. COCC uses Oracle databases and financial software on Intel servers running SUSE Enterprise Linux.

"Novell has a lot of complementary products, like its Secure Login and Identity Management software, so there is a lot Oracle could gain and leverage from Novell tools," he said.

But Biernat warned that Oracle’s support for more file- and print-oriented Novell software, such as BorderManager or its once-popular NetWare operating system, would likely suffer.

Noel Yuhanna, an analyst at Forrester Inc., said building or buying its own Linux would be a “natural move for Oracle.”

“With Oracle continuing to lose database market share on Windows to Microsoft, and SQL Server and Windows gaining momentum, Oracle has to choose another battlefield where Microsoft does not play,” he said. “With Linux already becoming a strategic component for Oracle, acquiring Novell or Red Hat would be the way to go.”

A version of Linux customized for Oracle would be a boon for users, said Ari Kaplan, president of the Chicago-based Independent Oracle Users Group (IOUG).