Oracle shows no momentum in Linux effort

By Jim Finkle - Analysis

BOSTON (Reuters) - Oracle Corp. (ORCL.O: Quote, Profile, Research, Stock Buzz) promised to take the Linux software world by storm last October, but the major expansion by one of the world's largest software companies so far has failed to show momentum.

Tiny rival Red Hat Inc.(RHT.N: Quote, Profile, Research, Stock Buzz), which over a decade built a services business around Linux and legitimized the free, cooperatively developed operating system for corporate computing, has survived the onslaught and even grown.

It is still early days, but Oracle has not disclosed any major deals, and Wall Street remains cautious on the future of Oracle Linux.

"We haven't seen any announcements about customer wins. That's very telling," says 451 Group analyst Raven Zachary.

Redwood Shores, California-based Oracle declined to comment on its Linux program.

Linux is the most popular type of so-called open source software, a movement begun as a grass-roots approach to program development. Any improvements are shared, allowing Oracle to base its software on Red Hat's version.

The cooperative nature of the Linux community has united its supporters against Microsoft Corp.(MSFT.O: Quote, Profile, Research, Stock Buzz) and its Windows system, even though Linux developers also fight one another.

Oracle doesn't expect huge revenue from its Linux product, but entering the fast-growing Linux market propels the company, known for its massive databases, into an industry segment where it has only indirectly participated.