Oracle, a Firm That Sells Commercial ERP and Database Products

question 45

Multiple Choice

Oracle, a firm that sells commercial ERP and database products, provides Linux for free, selling high-margin Linux support contracts for as much as five hundred thousand dollars. Oracle's motivation for this lies in:

• A) accelerating the shift of open source software towards a proprietary regime.
• B) using open source software to fuel sales of ware.
• C) impoverishing other open source developers and furthering its own proprietary offerings.
• D) using open source software to wean customers away from competitors.
• E) protecting itself from the risks of distributing code while unaware of legal implications.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.

Break-even Sales

The amount of revenue required to cover both the variable and fixed costs of production, leading to a situation where a business makes neither profit nor loss.

Variable Costs

Costs that vary directly with the level of production output.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.