Oracle Corp.'s strategy of offering service and support for Linux at half the cost charged by Red Hat, Inc. could help it steal business from Red Hat, according to a survey from Pacific Crest Securities, a Portland, Ore.-based investment firm. The survey showed that many large companies consider Oracle's Unbreakable Linux – a Linux support program that is is essentially a copy of Red Hat's, but at half the cost – to be a credible option for Linux support, especially at such a low price.
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Almost two-thirds of respondents said support costs were "very important" in determining whether to stay with Red Hat. Of these, one-third said Red Hat would have to cut its prices by 50% to 74% to keep them as customers; slightly more than one-third said the discount would have to be between 25% and 49%.
A price drop like that wouldn't be unprecedented from Red Hat, according to Tony Iams, an analyst at Rye Brook, N.Y.-based Ideas International Inc. He sees no indication yet what decision Red Hat will make, but thinks it will have to either cut prices or convince customers that the extra costs are worthwhile. If it goes the latter route, he said, Red Hat will be helped by the fact that while Oracle has a strong presence in databases, its credibility may not extend into direct operating-system support.
The original version of this article, Red Hat users pine for discounted support, was posted on SearchOpenSource.com.