Red Hat's (RHT) new deal with the sponsors of the MongoDB database sounds like simple accretion - the addition of another arrow in the product quiver - but it puts the company on a collision course with the toughest guys in tech, Oracle (ORCL).
MongoDB is what is called a NoSQL database. That is, it does not use a structured query language, which is at the heart of traditional enterprise database systems like those sold by Oracle (as well as Microsoft's SQL Server and IBM's DB2).
A NoSQL system is less consistent than a SQL system, but it can handle much larger volumes of data efficiently, so many people involved in cloud computing especially like them a lot. The NoSQL boom started at companies like Yahoo (YHOO) and Google (GOOG) that had enormous volumes of unstructured data. Oracle did announce its own NoSQL product late last year.
For Red Hat, this is a mere product extension. It gives the company an open source database system that scales with its OpenShift cloud and integrates with its Enterprise Linux operating system. For Red Hat customers, it's a more complete solution.
But it also reflects a growing competition between Red Hat and traditional enterprise software companies, especially Oracle. In the past Oracle has often reacted to such competition by simply buying out the other guy. That's what it did in the past with companies like Siebel and Sun's mySQL.
As the competition with Red Hat heats up, it's something investors need to watch closely. Many people have said repeatedly, here and elsewhere, that Red Hat could never be subject to a takeover, because it's open source, or because IBM wouldn't like it, or because the company would resist.
Well, others subject to Oracle's embrace have resisted, too. And they're not around anymore.
Disclosure: I am long GOOG.