Red Hat Signs Definitive Agreement to Acquire JBoss
April 10, 2006 Leave a comment
The rumors were wrong. Oracle isn't going to acquire Jboss, Red Hat is. A very interesting move I think, one that is a little more aggressive than Red Hat has been lately. RHAT went up almost 10% on the news. From the press release:
Red Hat will acquire JBoss for approximately $350 million in initial consideration, plus approximately $70 million subject to the achievement of certain future performance metrics. The transaction consideration is composed of approximately 40% in cash and 60% in Red Hat common stock.
I think this is extremely good news for Jboss and its community. Red Hat gets Open Source. They have proven it time and time again. The end goals, not to mention community and culture, of Jboss are also much more aligned with Red Hat than with Oracle. While Oracle hasn't done anything crazy with InnoDB or Sleepy yet, you still have to admit their long term independence is far from secure. With this purchase, Red Hat is taking another step further away from being a software company and closer to being a services one. That's another nice thing about merging the Jboss product offerings into the Red Hat suite – they're already a subscription based model.
Taking a step back for a moment, this move has all kinds of ancillary repercussions. Red Hat has traditionally had IBM as a very strong partner. They now have a directly competing product though, so we'll have to see how IBM reacts. RHEL has always been one of Oracle's preferred platforms. With Red Hat + Jboss will we now see a minor shift toward SLES from Oracle? BEA is already jumping on this one, claiming that they are now the only independent vendor of application servers, “not tied to a particular OS or database”. They've even gone as far as to say they would potentially leverage Jboss and contribute to the project if the IP model changed. In the end, I think this was a great move for Red Hat though, assuming they can limit the Oracle and IBM fallout. This will get their foot in the door at a whole range of high end installations that they just wouldn't have seen before. Now, they just need to convert that foot in the door to more subscription sales.
Red Hat, Jboss, RHAT, Oracle, Open Source, BEA