Red Hat Signs Definitive Agreement to Acquire JBoss

RedHat.com ^ | 2006-04-10 | RedHat

[N3WBI3]

OSS PING

If you are interested in the OSS ping list please mail me

[softwarecreator]

Wow.  This is huge.  Thanks for the ping.

[N3WBI3]

The winner here is RedHat
This is a push for Oracle (they dont get JBoss but people are not going to migrate off of oracle for this)
Losers IBM (websphere), BEA (weblogic): This is not a killer for them but many might look at consolidating support vendors with Redhat for smaller java server applications.

[N3WBI3]

And from the perspective of JBoss:

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Frequently Asked Questions
What is being announced? » Red Hat and JBoss have signed a definitive agreement whereby Red Hat will acquire JBoss. The acquisition will join together two of the leading open source vendors to create the defining Open Source development and deployment Platform for the Enterprise. Together, the companies will focus and providing an end-to-end open source solution for next generation IT and application architectures, including SOA. Both companies are dedicated to accelerating the adoption of open source, building a vibrant ecosystem, and, most importantly, delivering low cost, high value solutions for the customer.
What is the timeline for the acquisition? » We expect the government regulation approvals necessary for closing to occur within the next 60-90 days. Until closing, both companies will operate as independent companies. Details on future plans will be shared after the closing.
What is the rationale behind Red Hat acquiring JBoss? » Red Hat has built a successful and profitable business, delivering value to customers by helping them unlock the value of open source (#1 in value, CIO Insight 2 years running). Through a unique subscription model, Red Hat has helped customers shift from closed, proprietary systems to open, standards-based systems. Specifically, the migration from Unix-to-Linux has helped customers lower their deployment costs, while giving them new flexibility to scale their IT infrastructures in new and different ways.

But the promise and possibilities of open source go beyond just deployment. Open source has the possibility to alter the entire cycle of IT projects, from development, from testing and certification and into deployment. And as IT infrastructures become more complex and loosely coupled (with web services and service-oriented architectures), and as development teams become more global and distributed, the innovation and transparency of open source software and, and the principles by which open communities grow, are creating new sources of economic value for forward-thinking IT organizations.

Red Hat is seeking to redefine the technology landscape by helping unlock the value of open source and open communities for customers. The acquisition of JBoss is the next major step toward achieving this goal.
What is the rationale behind JBoss choosing Red Hat? » The goal of JBoss has always been to promote and accelerate the adoption of Open Source and the Professional Open Source Model. Although JBoss was experiencing tremendous growth as an independent company, there was an even greater opportunity to join forces with a larger and more established open source provider that could further expedite the growth of the channel, expand the services offering and coverage, and expedite acceptance of JBoss technology as an enterprise standard. Together, JBoss and Red Hat will form the industry’s largest independent open source provider that provides additional customer value through wider open source technology choice, trusted services from a single provider, a large and vibrant developer community, and an expansive partner eco-system.
What is Red Hat's plan to integrate JBoss? » As part of its commitment to open source, Red Hat is focused on ensuring continuity and growth for the JBoss solutions portfolio, customers and community. Red Hat will also reach out to the wider Open Source community to encourage continued and active participation in the success of JBoss open source projects.
How will customers benefit from this acquisition? » Customers will ultimately benefit from the business agility provided by the powerful combination of the RHEL platform and the JBoss JEMS Suite and from the expanded low cost, high value solutions these companies will create. Specifically:

* Increased confidence from one open source platform for the enterprise, spanning from bare metal to applications
* The simplicity of a single open source platform for reducing cost and improving efficiencies across the entire application lifecycle from design and development through testing to production of mission-critical applications.
* More choices for building an open source architecture via a large and vibrant eco-system of solution and service partners
* Global support coverage from a trusted service provider that includes improved manageability via an online service network
* Additional long-term stability for the combined company’s products and services
* A low cost on-ramp to Service Oriented Architectures (SOA)

How will partners benefit? » Red Hat and JBoss both expect this acquisition to increase the overall demand for open source and services. This union creates the logical target platform for ISVs and OEMs to bundle and/or embed and increases the market size for compatible and certified products and services for Red Hat and JBoss enterprise customers. Together, Red Hat, JBoss, and our eco-system of certified partners will continue to provide exceptional customer value and lower the cost of IT for our joint enterprise customers.
How will the open source community benefit? » Both Red Hat and JBoss are dedicated to preserving the integrity of open source. This union will bring together two of the market and brand leaders in open source and create the industry's first comprehensive open source platform for the enterprise.
The combined companies will continue to invest in development of new open source technologies while reaching out to the wider open source community as a whole to encourage continued and active participation in the success of combined open source projects.
What are Red Hat's Go-to-Market plans for JBoss? » The immediate release plans for JBoss products and technologies will be unchanged by the Red Hat acquisition. Once the deal is completed, Red Hat will provide technology roadmap and integration plans.
Will the JBoss code base be merged with Red Hat’s Linux distribution? » Any and all product development and packaging announcements will occur after closing.
Will Red Hat continue to offer the JBoss Subscription? » Yes. Red Hat and JBoss have extremely synergistic subscription-based business models and will continue to act as agents of change in evolving the business landscape of IT computing and delivering consistent customer value.
Will JBoss continue to support multiple operating systems? Will Red Hat continue to support multiple middleware platforms? » Yes. The infrastructure required to support a Service Oriented Architecture for customers must support heterogeneous platforms. It is therefore important to our customers that we provide an open platform that can support customer’s heterogeneous environments. Red Hat will continue to support multiple middleware platforms and the JBoss Enterprise Middleware Suite (JEMS) will continue to operate on multiple operating platforms.
Will JBoss World be going away? » JBoss World Las Vegas will be held as planned. In fact, we expect our JBoss World user’s conference to draw even more attendees than previously estimated and we very much welcome your involvement in this global user conference event. Visit www.jbossworld.com for more details.

[softwarecreator]

A good point.  This was a smart move for Red Hat and shows why they are the leaders in Linux.  You have to give them credit, they saw an opportunity and took it.  $350M is a lot but it will work out to their advantage in the long run.

[softwarecreator]

LOL.  You beat me to it.  I was going to ask if you had any specifics (beyond the article) on Red Hat's plans after the buyout.  You are quick, my friend.

[N3WBI3]

Whats funny is we have been tossing around the idea of moving some of our simple low-volume webapps over to JBoss and keep the Weblogic licenses we have for larger more mission critical applications. My main resistance to doing anything like that would be picking up yet another vendor..

[zeugma]

Whats funny is we have been tossing around the idea of moving some of our simple low-volume webapps over to JBoss and keep the Weblogic licenses we have for larger more mission critical applications. My main resistance to doing anything like that would be picking up yet another vendor..

We're doing essentially the same thing. Apache/Tomcat for small apps that don't need the goodies that come with WebLogic.  For the larger apps, it doesn't make any sense, because we'd lose some of the clustering and other capabilities that WL provides.

[Ernest_at_the_Beach]

Red Hat in $350 million deal for JBoss

Shares climb following news of cash-and-stock deal

By Michael Paige, MarketWatch

Last Update: 12:54 PM ET Apr 10, 2006

LOS ANGELES (MarketWatch) -- Red Hat Inc.'s shares jumped on Monday after the maker of open-source software said it would acquire closely held JBoss Inc. in a cash-and-stock deal worth around $350 million.

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RHAT29.69, +2.26, +8.2% ) , the leading player on the market for the Linux operating system, said the planned acquisition would help accelerate a shift towards service-oriented architectures.

JBoss makes open-source middleware products that help software applications work together. Its products, including application servers, compete against offerings from the likes of Oracle Corp. (ORCL :

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ORCL13.83, +0.08, +0.6% ) , BEA Systems Inc. (BEAS :

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IBM82.28, -0.20, -0.2% )

Raleigh, N.C.-based Red Hat's shares climbed following news of the deal that's expected to close around the end of May. The stock put on $2.34, or 8.5%, to $29.77.

Red Hat said the deal would be comprised of 40% cash and 60% of its common stock. Additionally, it will pay another $70 million if Atlanta-based JBoss hits certain future performance targets, Red Hat said.

The deal is expected to dampen slightly Red Hat's results for its quarter ending Aug. 31, though it's not expected to affect earnings and cash flow for the whole full year. Red Hat said it the deal would add to both its earnings and cash flow for the following fiscal year, ending in February 2008.

"Red Hat and JBoss 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," said Matthew Szulik, Red Hat chairman and chief executive. "And we truly believe in the potential of software innovation, once freed from the fetters of proprietary development."

Open-source software, like the Linux operation system, sprung up as an alternative to proprietary software from companies like Microsoft Corp. (MSFT :

Microsoft Corporation

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MSFT27.30, +0.05, +0.2% ) , which dominates the market for software used to power the world's computers.

Service-oriented architecture, or SOA for short, is a method of building tech systems that deliver applications as loosely coupled, highly interoperable services.

UBS analyst Heather Bellini said the acquisition would help broaden Red Hat's product lineup, allowing it to be "more than just an operating-system company."

"We believe this is the right strategic move for the company as it seeks to expand beyond the OS stack," Bellini told clients. She rates the stock buy with a $34 target price.

Oracle, the Redwood Shores, Calif.-based software giant that has led a wave of consolidation in the business software industry, earlier had been widely speculated as a potential suitor for JBoss.

[Golden Eagle]

Hilarious! The top open source vendor Red Hat becomes more and more an exact mirror of the "evil" Microsoft every day, now trying to become a one stop shop themselves.

Don't even bother with the "but it's open source so it's different" because it's really not. If it was, they wouldn't be paying a dime for JBOSS, Red Hat would just be ripping off the JBOSS code and selling it without a dime back to JBOSS. But instead they're paying $350 million LOL, for a company that only brings in ~$50 million a year.

[N3WBI3]

When did I ever complain about MS bundling software?

If it was, they wouldn't be paying a dime for JBOSS, Red Hat would just be ripping off the JBOSS code and selling it without a dime back to JBOSS.

Well I guess if thats oyour view OpenSource is no longer communistic, afterall the guys who founded JBoss get 350 Million for their investment. Thank you for endorsing OpenSource software as capitalistic..

for a company that only brings in ~$50 million a year.

Yea and all they get for 350 Million (60% of it in stocks) is 50 Million a year and a product to compete with Weblogic and WebSphere... To that this purchase might not push more people running JBoss on Solaris, Windows or other operating systems to look at RedHat is foolish and the market agrees with me..

[Golden Eagle]

LOL, most open source zealots despise Marc Fleury from JBOSS simply because he wants to make a profit. From Linux Insider:

http://www.linuxinsider.com/rsstory/49754.html

"Microsoft Chairman Bill Gates may be the most hated man in open source software circles, but Marc Fleury could come in a close second."

Said Fleury in his defense:

"I was desperate to make a living, and no one was paying for that. I am very proud to provide the best place to work for 60 developers and 30 absolute superstars, but that doesn't go without breaking eggs. When you make money and you talk about money, you're going to have some violent opinions thrown back to you. Linux was cute, because they have a penguin for a mascot. I don't make a very good mascot. If we had a possum, we wouldn't have any problem. From the get-go we did not expect anything except pure hate from these players, and that's what we get."

[N3WBI3]

Despite what 'most open source zealots' want and what OSS actually means are two different issues...

I cant thank you enough for making that point when you noted that an individual started a company around OSS software development and support and not too many years later sells that company for 350 Million to another company which was started around OSS software development and support.

And I know you're always concerned about Developer jobs in the US so I am sure when he says "I am very proud to provide the best place to work for 60 developers and 30 absolute superstars" showing that a small OSS company provided jobs, put money into the economy, added value to a product for business, provided a cost savings for business to be used other areas, and made a nice profit for its owners.

All of this despite that fact that the nutball stallman probably does not like JBoss and still all of this happens right under his nose. By pointing out that the more stallman like members of the OSS environment are not happy about this you're pointing out that Stallman does not call the shots..

Its really nice to have you backing my position for a change, have a nice day..

[Golden Eagle]

I've never been against all open source, and often recommend Apple OSX and Sun Solaris which use some open source in their development or final product. My problem is with the viral GPL license, which JBOSS doesn't use, while of course most zealots do, in fact some seem to almost worship it, hence the term "zealot".

Unless you're finally willing to speak out against GPL, and the zealots, which I seriously doubt, I don't see where anything has changed.

[antiRepublicrat]

I've never been against all open source, and often recommend Apple OSX and Sun Solaris which use some open source in their development or final product. My problem is with the viral GPL license

Most 'nixes ship with GPL software, even SCO's offerings.

[Golden Eagle]

Most 'nixes ship with GPL software, even SCO's offerings.

Not much. As I'm sure you would know, Stallman's "GNU" stands for "GNU's Not Unix". GNU software is designed "to make proprietary software obsolete" remember too. Something you don't seem to have a problem with. In fact you obviously prefer it. Where would you prefer to use Unix, specifically Solaris or OSX? Why are you supporting Stallman endlessly, when these other choices exist?

[antiRepublicrat]

Not much. As I'm sure you would know, Stallman's "GNU" stands for "GNU's Not Unix". GNU software is designed "to make proprietary software obsolete" remember too.

Of course I know all that. Until Linux came along, GNU consisted only of a bunch of UNIX tools and a partially completed kernel. These tools, without their own kernel, became very popular in all UNIX distributions. GCC, for example, is the standard for Linux, the BSDs and OS X, and ships with at least AIX, Solaris and HP-UX. That covers most of of the 'nix market, hardly "not much".

Where would you prefer to use Unix, specifically Solaris or OSX?

If I have a choice, I use software by merit and applicability to the role in that situation, not by loyalty. About the only thing I wouldn't do is buy SCO's offerings because I don't want a dime of my money going to a company that slimy.

Why are you supporting Stallman endlessly, when these other choices exist?

I correct factual errors and counter anti-OSS zealotry. And those other choices cost money and limit the freedom to tinker.

[FLAMING DEATH]

Explain why it has to be "either-or". Or did you mean it when you said some open-source was OK?

Also, explain how I support anyone when I use their bandwidth to download their software and use it without contributing anything back.

[antiRepublicrat]

LOL, most open source zealots despise Marc Fleury from JBOSS simply because he wants to make a profit. From Linux Insider:

We need to work on your terminology. Rabid Stallmanites attack anything that is not pure in Stallman's vision. Those are the people about whom both you and I probably have the same point of view. There is no point in bringing them up in an argument against us because we agree on them.

Then we get to the people who think open source (in general, not just the GPL) is a good practical idea, can produce grat software, save money, and even make money. They don't have a loyalty to any one license, although they may prefer one on practical terms (I like the MPL). Unlike you, they recognize that an author has the right to release his works under whatever license he chooses, and we respect that right. We'll call these people the Torvaldists given the public clashes the practical Torvalds has had with the idealist Stallman.

I haven't seen one FReeper I'd categorize as a Stallmanite, yet you continually try to portray us as such. This is a source of most of your demonstrated lies.