Does Red Hat Have a Choice?

Lora Bentley

Analysts and pundits alike haven't stopped talking since Oracle made the big announcement (that it would offer inexpensive support services for Red Hat Linux) and Red Hat responded in "tough guy" fashion that it will continue to compete in the market -- without dropping prices.

 

Most have been critical of Red Hat's approach, thus far. iTWire's Stan Beer says the company will have to do way more than talk tough to survive Oracle's attack, which he sees as an attempt to drive Red Hat's stock prices into the ground and facilitate an inexpensive acquisition down the road. The company must continue to innovate and raise the bar for its own product, as well as drop its prices. Otherwise, there won't be any more decisions to make, Beer says.

 

Some, like financial analyst Brandon Barnicle, don't see anything about which to be overly concerned. He noted in a recent message to investors that Red Hat's cash flow will remain steady even if it does cut prices in order to remain competitive. (Since the company's stock prices rebounded a bit after that news, someone is listening to Barnicle.)

 

Open source expert Bernard Golden expressed similar sentiments yesterday at CIO.com. It's not time for Red Hat to raise a white flag in surrender. In fact, he says, Red Hat brings more to the table and is more likely to win this fight. Why? For starters, Oracle's own competing agendas will hamper the effort. And realistically what customer will spend a mint on infrastructure while opting for a "cheap" operating system? It doesn't make sense, he says.

 

We've learned the hard way not to make predictions on things like this, but it will certainly be interesting to watch it play out -- as well as to chronicle its effects on the open source market at large.



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