Red Hat Buying JBoss

Acquisition of the open-source application server vendor comes after JBoss and Oracle were unable to reach a deal.

April 10, 2006

2 Min Read
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Red Hat Inc. is purchasing JBoss Inc., the open-source application server company, a step that's sure to reduce it as a supporter of its previously favored Jonas application server project.

Another open source project, the Apache Software Foundation's Geronimo, is heavily backed now by IBM. IBM's support has appeared to bring new life to the formerly struggling Geronimo project, founded by two disgruntled former members of the JBoss development team.

Red Hat is paying $350 million for JBoss after negotiations between Oracle and JBoss broke down last month. Those negotiations haven't been made public, but JBoss CEO Marc Fleury was reportedly seeking a higher price from Oracle than the $350 million figure. Red Hat will pay 40% of the price in cash and the rest in Red Hat stock. Red Hat will add $70 million to the price if JBoss meets "certain future performance metrics," said Matthew Szulik, Red Hat chairman.

"It is at Red Hat's very core to help unlock the power of open source and open communities," Szulik said in a prepared statement. The acquisition is expected to be completed by the end of Red Hat's first fiscal quarter in May.

The acquisition moves Red Hat out of the position of Linux distributor and makes it an open-source middleware vendor competing with BEA Systems, Sun Microsystems, and IBM, as well as other open-source startups such as LogicBlaze, which includes Geronimo in its Fuse stack of open-source software.IBM also offers what it terms a low-end stack of open-source code, including Geronimo, based on its acquisition of Gluecode last year.

"JBoss and Red Hat are fully aligned around the belief that the open-source development model continues to change the economics of enterprise IT in favor of the customer," Szulik added.

Jonas is an application server project of the France-based ObjectWeb consortium.

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