Subject: Re: Larry Ellison on FSBs
From: Thomas Lord <>
Date: Sat, 22 Apr 2006 23:06:14 -0700

Lawrence Rosen wrote:
> It is not a joke. I meant it seriously. /Larry Rosen
Ok.  Please forgive my insecurity, then.

So, I think LE makes a good case that these companies aren't much
worth owning from Oracle's strategic perspective. I personally
interpolate from that and question their long term value in general (as 
they stand).

Part of Oracle's perspective is pretty clear.   It's what someone once 
described as
a "make or take" decision:  they can build distributions and support around
any of the FOSS software projects at least (and probably more) efficiently
than they could integrate an acquisition.

Ok, but product and infrastructure are one thing and future value of
contracts and brand is another.   It's in this second area that I think 
I see the rest
of Oracle's perspective and the bridge to my personal perspective.
Why buy an RH when you could build a better one for less?

If it's so (relative to market cap) easy for someone to replicate an RH,
and possibly (as LE argues elsewhere in the article) outperform them
on customer service -- then isn't their "going concern" value (as Don
Marti put it) quite limited?   Are the contracts and brand really that
valuable, at this time?

The deep underlying problem seems to me to be that RH is charging
for things that don't make long-term sense to charge for in the FOSS
world (such as seat licenses for RHN subscriptions).  My impression
is that some big customers are happy to go along with that fiction because,
in reality, RH just goes great guns on R&D maturing the GNU/Linux
platform.   Trouble is, that indirection -- that polite fiction -- 
results in a
kind of house-of-cards business model.  (It also doesn't much help the
overall architecture of today's FOSS stacks or the direction of the 
of volunteers in the FOSS world.)

That, at least through my lens, was LE's point (admittedly, with some of my

(In spite of past ranting against them, and current criticism, I'm 
an RH fan, of late.  Who knows... it could very well be a case of me 
just getting
to understand them better.  Still, I think the contradiction I've 
pointed out
above -- that "polite fiction" in their business model -- points towards 
its own