Oracle, an enterprise software firm, on Wednesday said it would offer technical support for Linux software at cheaper rates than those of Red Hat, a top Linux distributor—a move that plots the two firms against each other in a battle for market share in the space, Reuters reports.
Larry Ellison, Oracle chief executive and chairman, said the move is meant to resolve a number of issues that are keeping big businesses from embracing Linux, according to Reuters.
Ellison also stressed that the firm’s pricing will significantly undercut Red Hat, Reuters reports.
“Our support costs less than half what Red Hat charges,” Ellison said at the yearly OracleWorld event in San Francisco, Calif., according to Reuters.
Red Hat spokespeople did not immediately respond to Reuters’ request for information.
Linux is the most popular and widely used variation of open-source software, which allows developers and programmers access to its code to build their own add-ons and additional features. Some add-ons and customized options cost money, but the base software itself is free and open to modification.
In the past, Oracle has served mostly as a database and applications vendor, but it will now offer an operating system as well and will have what is commonly referred to in the industry as an entire “software stack,” Reuters reports.
The move will likely provide some healthy competition for software giant and Oracle competitor Microsoft’s Windows operating system, but it could also erode some of the “spirit of cooperation”—as Reuters puts it—currently felt in the open-source space due to the introduction of strong competition and the potential to rake in big money.
When asked about the possible effects the firm’s entry into the Linux space may have on Red Hat, Ellison responded with candor, according to Reuters.
“This is capitalism; we are competing,” he said, Reuters reports. “We are trying to offer a better product at a lower price.”
Oracle will now fix bugs in current and older versions of Red Hat Linux, offering similar support that it currently does for users of its databases and other applications, according to Reuters.
Red Hat shares dropped more than 16 percent to $16.32 in after-hours Nasdaq trading on Wednesday, while Oracle shares increased slightly to $18.71 from $18.62, Reuters reports.
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