Oracle's Linux support programme has seen a "very strong start", which included replacing Red Hat at Yahoo, according to CEO Larry Ellison.

Ellison announced the programme back in October at Oracle's OpenWorld conference in San Francisco, but since then the company has declined to comment on its progress.

"This is just the beginning," he said yesterday after Oracle's third-quarter fiscal 2007 results were announced. "We're not going to build a Linux business overnight, but we will build it. We're determined to offer the best support in the world."

Ellison said that Dell and HP will both resell Oracle's Red Hat Linux support service, and that it has already started to close big deals.

"We have replaced Red Hat at Yahoo as their Linux support supplier," Ellison said. Without naming other customers, he said Oracle has signed Linux support deals over $500,000.

In keeping with tradition, Ellison took the opportunity to trash-talk Oracle's competitors. He claimed that Oracle is growing much faster than BEA in middleware and than SAP in business applications.

"It took us five years to pass BEA, but we did it," Ellison said. He also expects Oracle to eventually have a middleware business twice the size of BEA.

Part of Oracle's strategy to trump SAP, the current number-one seller of enterprise applications, is to focus on selling industry-specific applications to existing Oracle customers, according to Ellison.

While the enterprise resource planning (ERP) piece of the business applications market is relatively mature and slow-growing, Oracle is seeing its industry-focused applications and its customer relationship management (CRM) software business expand quickly.

"We have a good chance to overtake SAP," Ellison said. "We're gaining on them consistently and rapidly."

Oracle saw particularly strong sales of retail-specific software, Ellison said, with deals also lining up for applications focused on the telecommunications and utilities sectors.

Oracle has grown its industry expertise through acquisitions of companies like Retek, Portal and MetaSolv, a trend it plans to continue.

"We'll get stronger in the industries we're already strong in," Ellison said. "If we can enter other industries in the number-one position and exploit that, we will. We like to buy category leaders."