Open-source market seen taking off
Demand in China for open-source software, which competes as a low-cost alternative to proprietary products, is set for rapid expansion thanks to separate initiatives by rivals Oracle and Microsoft, according to Red Flag Software.
Red Flag, China's largest open-source system supplier, has endorsed Oracle's Unbreakable Linux initiative, which provides enterprise-quality support to users of products from United States-based Red Hat Linux, and to Microsoft's alliance with open-source proponent Novell.
'With Oracle providing Linux support service, this will enhance the strength and speed of Linux's growth in the market,' said Larry Geng Zengqiang, director of product and marketing at Red Flag. 'Microsoft's co-operation with Linux acknowledges that development.'
Linux undermines Microsoft and other vendors of proprietary operating systems by making programs available without royalty payments. Red Hat and Red Flag get revenue from packaged support for Linux products. Revenue from Linux server sales in Asia-Pacific reached US$475.2 million last year, up from US$296.8 million in 2004, Gartner says.
Linux has become 'a disrupting factor' in the server operating system software market because of its perceived low cost of adoption, the research firm said.
Oracle on October 25 unveiled new enterprise-class support for Linux, dubbed the Unbreakable Linux program, on average 50 per cent cheaper than the top charges by Red Hat, a leading proponent and supporter of the open-source system.
Oracle promised to indemnify users against Linux patent infringements. Fear of patent-related lawsuits linked to Linux has held back firms from investing in the system.
'We believe that the better support and lower support prices will speed the adoption of Linux, and we are working closely with partners to make that happen,' Oracle chief executive Larry Ellison said.
Microsoft and Novell, the second-biggest installer of Linux-based servers, last week announced an extensive deal to make their Windows and Linux software products work together.
The patent co-operation deal also enables Microsoft, and Novell to assure customers of protection against patent infringement claims.
Mr Leng said neither the Oracle initiative nor the Microsoft programme, unveiled last week, will hurt its business. 'We have a long-term co-operation with Oracle in Asia,' he said.
Red Flag, Tokyo-based Miracle Linux and Haansoft of South Korea announced in April a new joint venture formed after a two-year-old alliance to develop the Asianux operating system and other open-source software.
Asianux is one of three Linux distributions supported by Oracle's Unbreakable Linux program. Oracle has a 50.5 per cent controlling stake in Miracle Linux.
'We also welcome Microsoft's co-operation with Novell,' Mr Leng said. 'Later, Microsoft will probably extend the co-operation to another Linux company.'
Microsoft acknowledged that many users and software vendors wanted open-source and patented systems to work together. 'In China, as in all countries, organisations are using both Linux and Windows as part of their computing infrastructure. Customers want their vendors to embrace interoperability,' said Jason Matusow, senior director of intellectual property and licensing at Microsoft.
China remains a slow-growing server software market and has one of the lowest rates of Linux adoption in the Asia-Pacific.
'Despite the aggressive promotion of Linux by the government, the Chinese market still favours Windows and Unix because of the wider availability of solutions,' Gartner said in a recent report.
'With China's population of 1.3 billion and more than half of the Asia-Pacific server market, over 70 per cent of large Chinese organisations still haven't deployed Linux.'
Mr Ellison stressed Oracle was deeply committed to accelerating the growth of the Linux operating system platform as a viable low-cost alternative for enterprises. Oracle target Red Hat has the most Linux server installations worldwide, followed by Novell's Suse Linux.
Since its inception in 1994, Red Hat has focused on subscription licensing to enterprise customers. Its total revenue reached US$196.5 million last year.
'Oracle's entry into the Linux support market will inevitably slow Red Hat's momentum and raises doubts about its long-term viability,' Gartner said.
Dion Wiggins, Gartner vice-president and research director in Hong Kong, calls Oracle's move 'a wake-up call' that shows how proprietary-licensed technology vendors can selectively adopt open-source business models.
Michael Mudd, director of public policy at the Computing Technology Industry Association, said the deal provided choice and assurance of better products. 'The import of the agreement reaffirms the industry's faith in voluntary, market-driven decisions as the best path to consumer satisfaction,' he said.