Oracle killed Red Hat with a price war

Once again, Oracle CEO Larry Ellison made the entire software industry shaken. Only this time does not involve an acquisition.

It seems to be itchy with Red Hat, the number one Linux software distribution company today, Ellison has announced that Oracle will charge "much lower" prices to compete with Red Hat products.

The price reduction offered by Oracle is at least 50% - a news that pushed Red Hat's stock price down more than 16%. Investors were skeptical about the resistance of the Red Hat "dwarf" to this stormy challenge.

The "assassination" case of Red Hat once again extends Ellison's hustle and bustle efforts to lift Oracle to become the world's second-largest software enterprise, behind Microsoft. Over the past 2 years, Oracle has spent about $ 20 billion to acquire many other small software vendors. The most popular is still the bid to buy PeopleSoft back to the last 18 months.

Source: AP If Red Hat shares continue to slip, it is likely that the company will become a "bargain" target of an acquisition. Oracle officials declined to comment on whether they were interested in acquiring Red Hat /

" I don't think this will kill Red Hat. This is simply capital investment. We are all competing ," Ellison said.

Moribund?

Specialist Trip Chowdhry believed that Red Hat was about to fall into a "prey" situation for ragged giants, but he predicted that IBM was the buyer and not Oracle. But the majority of investors think that Oracle's attack this time will make Red Hat serious.

Evidence is that the price of Red Hat's stock is rising 10 cents just before Oracle made the shocking announcement, then suddenly dropped $ 3.18, or 16.3%, immediately after the session.

Chowdhry predicts Red Hat's revenue will be damaged by this step of about $ 40-50 million per year (last year's Red Hat revenue totaled $ 278 million - a very small portion of the revenue of 14.4. billion USD of Oracle.

However, Red Hat president Matthew Szulik remains optimistic and underestimates the impact of the statement on his carrier's network. He affirmed that Oracle's move is a positive development of Linux on the way to replace the Windows operating system that is cornering the market.

" Of course, there are always worries. But at least this event proves one thing: Oracle admits Red Hat is the leader in Linux today. We still have very strong products and we will compete ".

Private or .?

Some suggested that this was Oracle's retaliatory action when several months ago, Red Hat passed Oracle in the acquisition of open source software company JBoss for $ 350 million.

However, Chowdhry said the contract to buy JBoss was just one of many reasons to annoy Oracle. Chowdhry believes Red Hat made a fatal mistake when boasting that Linux products can turn software into a popular commodity.

" Red Hat himself forced Ellison to counterattack, " Chowdhry said, although Ellison insisted he wanted to " speed up the open source market rather than revenge on his own ."

Since most of Oracle's proprietary software is designed to run on Linux, Ellison believes that the more big corporations welcome open source, the more money will be made.

Ellison's statement could be a multi-target arrow. Red Hat has a chance, Oracle has the opportunity to cut off its top talents in a situation where they feel overwhelmed by their future. " Larry is too high-handed. Obviously he never lost his knack for making ribs decisions. "

Trong Cam