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Rumor: Oracle to buy Redhat?

There has been a rumor going around that Oracle will buy Redhat. When you ask people why — the responses are very random at best. Some say Oracle has a banking mindset now with Charles Phillips is President … so they are looking for companies with good maintenance revenue streams and are looking at it as a financial transaction.

There is also some talk about this being an extension of the Oracle Unbreakable campaign. That campaign is widely mis-understood … what Oracle was offering there was 24×7 support with SLA that a problem will be resolved in certain amount of time. If a customer reports a problem, the open source community may not address the issue for months, so Oracle said we will fix the problem and give the code back to the open source community. This was to give customers confidence to adopt Linux as their platform.

There are some interesting symbiotic relationships in the open source space. SAP is supposedly a big promoter of MySQL. One view of this is that it is advantageous for a company to commoditize the stack beneath it. As the dollars charged for the stack below would naturally flow to the application and also returned to the customers. From this point of view it might make sense for Oracle to buy RedHat as most of its implementations today run on Solaris or HP-UX or even AIX. And it could offer the OS stack for free, get a maintenance revenue stream and also make the oracle solution more cost-effective with little impact on the price of Oracle.

Add comment September 3rd, 2006

IBM buys MRO: non-IT, IT asset convergence?

IBM’s acquisition of MRO for $740M took some people by surprise. On the surface it was not clear why IBM paid a premium: it shared a large percentage of customers with MRO. Also Tivoli does have enterprise asset management capabilities. As several news articles reported MRO was strong for non-IT asset management: physical assets like tractors,
factory equipment, carts etc. The real question was why get into that business?

Party conversation says IBM is just trying to catch up with HP, after selling off its PC business to Lenovo, HP is ahead in terms of revenue to be the largest computer company. But that can’t really be the reason, can it?

In an insightful conversation with a senior executive, he pointed out that the non-IT assets are getting similar to IT assets. For example, Caterpillar is adding capability to track tractors using IP address and RFID tags, and several IT assets are becoming like non-IT assets. The two business seem to be converging and over the next 10 years or so they will begin to look very similar.

A completely disconnected event: it is rumored that one of the bidders in a recent Service Desk bid was PeopleSoft (or Oracle) bid along with Microsoft. Where they were using PeopleSoft’s system which tracks chairs and tables along with employees as the base to extend to IT assets also.

But maybe it does make sense.

Add comment September 3rd, 2006