This is an important step because the Amazon has made cloud computing technology popular, threatening businesses to provide hardware and software. Instead of buying servers and software, businesses can rent on the cloud and pay for it based on what they use.
Many businesses have abandoned servers and repositories that move everything to Amazon's cloud data center. This success of Amazon also affected many big players like EMC, Hewlett Packard and IBM.
Microsoft, Oracle (all with their own Linux versions), Red Hat and many others are trying to fight Amazon with a solution called Hybrid Cloud, a hybrid technology that allows businesses to use both cloud services and physical server, easy to switch between those two options.
Linux 2 is Amazon's effort to 'reach out' into the hybrid world above. Last year, they also partnered with VMware to allow customers using VMware to easily transfer applications to Amazon's cloud.
Linux 2 also targets the giant on the Linux market: Red Hat. Even Amazon announced the Linux 2 on the day Red Hat announced its third quarter business results. The two sides are partners, but Amazon is famous for competing with its partners.
However, Red Hat investors may be overreacting. Karl Keirstea from Deutsche Bank advises them to stay calm because although Amazon releases Linux 2 it is hard to be happy with Red Hat, but it is mostly used for development and testing rather than running business applications. Companies won't leave Red Hat soon.
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