Red Hat Buys JBoss, Plus an Opinion or Two on the Business of Open Source

By Deane Barker on April 23, 2006

Red Hat Signs Agreement to Acquire JBoss: This is interesting, but we all knew it was coming.

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 percent in cash and 60 percent in Red Hat common stock.

We talked about Oracle buying JBoss, but Larry debunked that whole theory in an interview which really paints open source software in a bad light:

If an open source product gets good enough, we’ll simply take it. Take Apache: once Apache got better than our own web server, we threw it away and took Apache.

JBoss wanted to sell the company to us. Clearly if we wanted to buy JBoss we’d have bought JBoss. Why didn’t we buy JBoss? Because we don’t have to — if it ever got good enough we’d just take the intellectual property — just like Apache — embed it in our Fusion middleware suite, and we’re done. We always have that option available to us — IBM always has that option available to them.

He’s right. What does JBoss have that’s worth paying for? Their product is free.

Open-source software is great, but it’s often tough to build a business around. There’s a certain open-source system we use a lot, and the company behind it sells a commercial license. Try as we might, we can’t find a reason to buy one.

I’d love to give this company some money because I want them to continue what they’re doing, but the product is free, I don’t need support, and there’s no other need whatsoever for me to buy a license. In this case, the fee for the license essentially becomes a free will donation. I’m not against donating to open source projects, but I can’t ask my clients to do it.

I believe in open source software, I really do. But I also believe in commercial software for a lot of things.

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Comments

  1. you certainly can take money from your clients to support OSS … Target gives 5% off the top to charity; are you more of a scrooge than Target ??

  2. Target gives 5% off the top to charity; are you more of a scrooge than Target ??

    A corporate donation is fine, but when putting together a proposal for a client, I can’t just toss a line item in there for an open source license that they really don’t need to purchase.

    If they ask what it’s for (which they will, since clients are sensitive to non-labor expenses — they want to know exactly what they’re paying for and what they’re getting for it), what do I say? “It’s a voluntary donation to help the open source community”? Yeah, that’ll go over well.

    Yes, supporting this open source company helps my company in the long run, but it does nothing for my client.

    Ths situation half makes me wish the company would just close the source and charge a fee of $X for the software. Then I could just pass the charge through to my clients as a commercial software purchase.

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