Oracle CEO: Linux support program working

IDG News Service - Oracle Corp. has gotten off to a "very strong start" with its support program for users of Red Hat Inc.'s Enterprise Linux, according to Oracle CEO Larry Ellison.

Ellison announced the program 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 Tuesday during a conference call with analysts to discuss Oracle's third-quarter fiscal 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 Oracle Red Hat Linux support, including Dell Inc. and Hewlett-Packard Co. Executives from both companies warmly endorsed Oracle Linux in video clips during Ellison's October OpenWorld keynote address.

Yahoo Inc. 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.

In keeping with tradition, Ellison took advantage of the conference call to trash-talk Oracle's competitors. He claimed that Oracle is growing much faster than BEA Systems Inc. on the middleware side and than SAP AG 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 pure-play BEA.

Part of Oracle's strategy to trump SAP, the current No. 1 seller of enterprise applications, is to focus on selling industry-specific applications to existing Oracle customers, according to Ellison.

While the enterprise resource planning (ERP) piece of the business applications market is relatively mature and slow-moving in growth terms, Oracle is seeing its industry-focused applications and its customer relationship management (CRM) software business expand quickly. "We have a good chance to overtake SAP," Ellison said. "We're gaining on them consistently and rapidly."

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 Software 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 No. 1 position and exploit that, we will. We like to buy category leaders." Ellison referenced the philosophy of former head of General Electric Co. Jack Welch, saying being No. 1 in a market makes it much easier to make money.