I don't see how this story doesn't end with a whole bunch of people having to convert back to CentOS when someone at Oracle questions the value in offering this distribution for free.
I could imagine Oracle's long term goal would be to replace Red Hat's role as The Linux Distribution for commercial stuff. One way to do this would be to start this way. Without giving their stuff for free, they would never gain significant share of the total market.
I've tried to analyze this a dozen ways and so far the only one that makes sense is that Oracle has decided to kill RedHat. They want a billion dollar OS business and RedHat has that, but they can't just buy RedHat because with Linux the guys just quit and set up service as 'BlueHat' and continue on their merry way and the customers follow them.
So. The only way to kill RedHat is to take all of their customers. Since RedHat has a GPL'd product Oracle has just as much right to give it away as RedHat does. They try to convert 'free' customers to 'support' customers when a problem comes up.
If they are successful, people migrate to their version of Linux, RedHat dies, Oracle gets the support business because they are not dependent on Linux support revenues to survive. "Poof" Oracle 'owns' a billion dollar OS business. Their investment in getting it is probably less than a 'normal' buyout price if RedHat was a commercial software company.
Of course if they don't convert customers fast enough I'm sure Larry will grow tired of this ploy and flush it down the toilet. At which point people on Oracle Linux will be either sudden new RHEL customers or back to CentOS/SL.
Normally centos users would "grow into" payed support from RH. Now Oracle claims to give them that support without cost.
Unbreakable Linux was never an attempt to have their own distribution, it was to undercut RH, and now they're found a new way to do that through Centos.
It may cost Oracle money, but it costs RH more money, because, after all, they actually build a distribution.
Ideally, kill/buy RH, phase out Unbreakable, and cram in proprietary Solaris. But for now just destabilizing the RH ecosystem has to do.
It's obvious why Oracle is doing this. It's the same reason Red Hat does Fedora. It doesn't cost anything and eventually, you might reach a size or a problem where you need support. If you do, and you are running the free version of a company's Linux, that is the company that you will inevitably turn to (with your cash) for support.
Not to mention Red Hat is their competition in the Java space. Capturing people from Red Hat's ecosystem and moving them towards Oracle's is a pretty aggressive move. It's war on Red Hat. And also on Microsoft, which is using CentOS as a weapon against Red Hat on its Azure platform.
Because if you're running Oracle Linux for free, when you need support you're more likely to start paying Oracle than you would be if you were running CentOS or Scientific Linux.
If you switch to Oracle Linux and if you have some major problem you can't fix, then the next logical step is to pay for support. It would be a simple step to take since you're already running the official version.
Particularly because this is a weak point for Red Hat: they've even orphaned paying customers in the past and there's currently no supported migration path for CentOS. If you're using CentOS or Scientific and decide you want support, there's significant value to being able to pay for support without being told to do a bare-metal reinstall of everything first.
I'm not an Oracle hater (I just dislike them a little). But if this is true, then they have an economic incentive to _not_ issue free fixes in a timely manner. Or, (not to sound to tinfoil-hattish) to release _slightly_ broken things that don't impact an individual installation, but impact clusters.
Again, I'm not saying that they _will_ do the above; just that there is economic incentive for them to bring users into paying for support, and as long as they give it away for free, no one will bite.
There's an old wives saying (used in a different context), that says "why would a guy buy a cow, if he can get the milk for free?"
I don't see how this story doesn't end with a whole bunch of people having to convert back to CentOS when someone at Oracle questions the value in offering this distribution for free.