Putting Red Hat-JBoss in perspective

IBM makes more from middleware in two months than the combined OSS companies. But in the long runm, will that matter?
Written by Joe McKendrick, Contributing Writer

I would call last week's announcement that open-source software platform provider Red Hat was acquiring open-source middleware provider JBoss an example of the rise of a new "power couple" -- OSS and SOA.

Charles Babcock, writing in InformationWeek the other day, adds some new perspective to the transaction, noting that the $350-million deal could quickly lose value if Red Hat doesn't fill in key missing software pieces to the platform-middleware stack the two companies represent. And, he adds, success depends upon "if the pair can gain ground fast enough to avoid being trampled by that other powerhouse with a penchant for open source, IBM. And if Red Hat can meld in a startup company built by a controlling CEO and a prideful bunch of programmers."

And the scale of the acquisition is small in comparison to the market. To add some perspective, Babcock points out that Red Hat made $278 million last year; JBoss is on track to make $80 million this year. IBM middleware generated $2.7 billion in revenue last year.

IBM makes more in two months from just middleware than the Red Hat/JBoss "powerhouse" makes in a year. But in the long run, will that matter? Comparing open-source revenues to commercialized product revenues is, well, apples to oranges.

Implementations do count, and both Red Hat and JBoss do have some of the largest names in the corporate world as customers, and Red Hat is a closely allied business partner with IBM.

The world is quickly moving in the direction of commodity software stacks that are supported by diverse collaborative communities, and can be quickly assembled or disassembled as business needs require. This breaks in favor of OSS-SOA combos such as Red Hat/JBoss. 

Of course, IBM understands this, too, as does BEA.

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