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Open source goes big time with Red Hat-JBoss Deal
[April 17, 2006]

Open source goes big time with Red Hat-JBoss Deal

(InfoWorld Electronic News Via Thomson Dialog NewsEdge)Red Hats surprise announcement that its acquiring JBoss could upend accepted wisdom about both the size and function of open source software companies. Still, some customers are taking a wait-and-see attitude toward the deal.

The $350 million cash and stock deal will bulk up Red Hat with JBosss middleware and push the Linux maker farther up the software stack with traditional infrastructure suppliers like IBM, Microsoft, and Oracle. But tighter integration with Red Hat could complicate the plans of enterprise customers who use JBoss with products by IBM, Oracle, and others.

The acquisition is a seismic shift in the open source landscape, said Dana Gardner, principal analyst with Interarbor Solutions.

The combined Red Hat-JBoss organization will have a soup-to-nuts open-source stack with operating system, middleware, virtualization, and development tools, Gardner said, which will allow the company to cater to the needs of enterprises across the board.

Open source software will begin to play more of a role in developing new types of capabilities, instead of just commoditizing areas established by proprietary software, Gardner added.

James Governor, an analyst with RedMonk, expects users of rival middleware software to benefit from the tie-up. Customers are already using JBoss to whack IBM and BEA over pricing, he said. If youre a Red Hat customer and an [IBM] WebSphere customer, youll have a very interesting conversation with your sales reps over the next couple of months.

Red Hat also gives fast-growing JBoss a stable financial footing.

Its a good thing JBoss found a larger home and source of capital, said Jamie Cash, senior vice president of technology at NLG, a leisure travel company. NLG was an early adopter of JBoss software, using it to create a Web travel booking system in 2003.

Cash described himself as cautiously optimistic about the combined company, but said he had several concerns about the pending acquisition.

I would hate to see too much integration between JBoss and Red Hat, Cash said. NLG runs JBoss on Red Hat and Windows, with a combination of closed- and open source software including Oracle, MySQL, JasperReports, and Hibernate. Cash wants JBoss to remain vendor-agnostic in the future and worries that NLG will lose influence with JBoss after the company becomes part of Red Hat.

Michael Goulde, senior analyst with Forrester Research, said Red Hat may turn to acquisitions in the development tools space once it has digested JBoss.

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