Oracle will offer support for the Red Hat Linux distribution, the company's chief executive Larry Ellison said at the Oracle OpenWorld conference.

"There is a lack of true enterprise support for the Linux operating system. This has slowed the adoption of Linux," Ellison said in a keynote presentation.

"This isn't about competing with Red Hat. This is about increasing the adoption of Linux in the enterprise."

Red Hat only provides support for the current versions of its operating system, but many enterprises run older versions for which no bug fixes are made available. The company also doesn’t indemnify its customers against intellectual property claims, exposing Linux users to legal claims from companies like SCO.

Ellison furthermore charged that Red Hat support is too expensive with customers being charged $999 for support and updates for a server with up to two processors.

Users buying Oracle support with updates and software downloads are charged $399 for a two-way system and $999 for larger servers.

An offering that includes support for older versions and indemnification will cost $1,199 for two-way servers and $1,999 for larger systems. The vendor is offering a 50 per cent rebate for customers who sign up within the next 90 days.

"This gives you the same level of support that you have for your database and middleware. This support is available for most other operating systems, just not for Linux," Ellison said. "Until today."

Even though Oracle said that the offering isn't intended to target Red Hat, stock for the Linux vendor fell by about 17 per cent after Oracle made the announcement after the market close.

Oracle will download the Red Hat source code, apply patches and publish installable binaries free of charge. The software vendor is guaranteeing that users can switch to its support services by only changing the URL of the update server for their current Red Hat distribution.

Earlier this year Ellison said that he is seeking to offer a complete software stack from an operating system up to middleware and applications.

Oracle chose to support Red Hat Linux because it is the dominant Linux distribution for the enterprise market, Ellison said.

Prior to Ellison's presentation reports had suggested that the company would support the Ubuntu distribution. The distribution is a popular desktop option and recently launched a server version. Sun Microsystems is supporting the software on its Nigara systems.

By making Linux a more attractive option for enterprise users, the comapny is trying to limit the control that Microsoft has on its application and middleware business, argued Carl Olofson, a research vice president for information management and data integration software with analyst firm IDC.

He added that Red Hat support is unlikely to make a big impact on the vendor's revenues.

"Oracle would like to make money off this, but they are pricing this to support their database and middleware software business," Olofson told vnunet.com.