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Ellison cited the Yahoo deal as the first real evidence of progress from Oracle's high-profile attack on Linux leader Red Hat that began in October. Oracle is cloning Red Hat Enterprise Linux, selling support for less than Red Hat's list prices.
"We've already signed a number of support contracts, some for over half a million dollars. And Oracle has displaced Red Hat at Yahoo and numerous other customer sites as their Linux support supplier," Ellison said on a conference call after announcing the company's quarterly financial results. (According to a Thomson Financial transcript, Ellison used even bolder terms, saying Oracle "replaced" Red Hat at Yahoo.)
Red Hat and Yahoo both said that Red Hat hasn't been kicked out of the account, though.
"Our current infrastructure leverages both Red Hat and Oracle Linux products," Laurie Mann, Yahoo's vice president of engineering, said in a statement. And Red Hat spokeswoman Leigh Day added, "Red Hat and Yahoo continue to enjoy a fruitful relationship."
Oracle didn't respond to requests for comment.
It's no surprise that computing technology companies would be eager to sell to Yahoo, which said it has hundreds of thousands of servers to power its business. And while it's unclear how broadly Yahoo will use Oracle's Linux, it is notable that Oracle has secured a high-profile customer, an important milestone.
"We're not going to build the Linux business overnight, but we will build it," Ellison said. "We're in the early days of our Linux support business, but we're off to a very solid start. Our Linux support service is up and running well. Dell, HP (Hewlett-Packard) and CDW (a computer products reseller) are on board to resell Oracle Enterprise Linux."
Red Hat said in December it saw no effect of the Oracle Linux move in its most recent quarter, and Red Hat Chief Executive Matthew Szulik said he didn't plan to lower prices.
Oracle has been a strong Red Hat partner, investing in the Linux seller in 1999 and heavily promoting the operating system. But the two companies have diverged as Linux has matured.
Red Hat in 2006 acquired JBoss, whose open-source Java server software competes directly with Oracle software. For its part, Oracle's Unbreakable Linux program turned Oracle into a direct Red Hat competitor. Oracle didn't just sell a version of Linux, it cloned Red Hat's from the source code in an attempt to reproduce its software and hardware compatibility.
The competition hasn't died down. This month, Red Hat announced its Red Hat Exchange, a mechanism to sell software from open-source allies, several of them Oracle competitors.
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(And yes, that was sarcasm.)
Well, there's a good lesson in this story on the value of intellectual property or proprietary software.