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Guest Editorial — Is the Red Hat-JBoss Deal Good for Everyone?

Guest Editorial — Is the Red Hat-JBoss Deal Good for Everyone?

Red Hat's announcement last month that it was buying JBoss has been the hot topic for almost anyone involved with Open Source.

It's too early to tell exactly what the ultimate outcome will be. However, we can begin to speculate on what it means for end users as well as the Open Source community and the ecosystem. Having completed several acquisitions in my career, there are a few factors that impact the success or failure of an acquisition including the strategic fit and the cultural fit.

Based on the strategic and cultural fit of these companies, I believe that the combination of Red Hat and JBoss makes a lot of sense. Operational execution will be critical to the final outcome.

Strategic Fit
Customer Perspective
Based on what we hear from enterprises, we think that the most end-user companies will be happy with the acquisition. There may be some concern among users of non-Red Hat versions of Linux, but our enterprise customers like the idea of a one-stop shop for Open Source support - especially since some of our Fortune 1000 customers are using hundreds of Open Source projects. This acquisition is only a start towards addressing this customer need. Ultimately, companies want "one throat to choke" for all of their Open Source support

Industry Perspective
This acquisition is a clear signal from Red Hat that it intends to expand beyond the operating system. With Fedora and JBoss, Red Hat will have the beginnings of a "fixed" Open Source stack for the enterprise. It will put pressure on other providers of Open Source stacks, such as SpikeSource, SourceLabs, and Novell. This step will likely help commoditize these fixed Open Source stacks.

This expansion also aligns Red Hat even more directly against traditional "stack" providers such as Sun, Microsoft, and IBM. Larry Ellison seems intent on adding Oracle to that mix. However this clash of Open Source stacks versus commercial stacks ignores a critical fact. Most large enterprises use hundreds of Open Source projects mixed in with proprietary and commercial software. We believe the larger need is for companies to have the flexibility to create stacks that mix the Open Source and commercial components that meet their specific needs.

Cultural Fit
Much of the speculation around the acquisition has focused on whether there's a personality match between Matthew Szulik of Red Hat and Marc Fleury of JBoss. As was widely reported, Fleury has written some impassioned blog entries critical of Red Hat.

Despite the apparent conflict, I believe these two companies could potentially be a great cultural fit. "Culture" is bigger than just the personalities of the management - it includes the roots and core values of each company. In this case, both companies have shown a dedication to the Open Source movement and have provided significant contributions to the Open Source ecosystem.

The Bottom Line
In the end, the success of the combined company will define the success of the acquisition. If the new combined management team can align around a shared vision while remaining flexible about the details of how the company is structured to take advantage of the market opportunity, it will greatly increase its likelihood of success.

Open Source has penetrated the enterprise and enterprises are looking for ways to further leverage these new technologies. C-level executives will continue to look for solutions to reduce Open Source risks while still optimizing its benefits. And this won't be the last Open Source acquisition we see, since the Open Source business model is proving itself viable in the enterprise.

More Stories By Steven L. Grandchamp

Steven Grandchamp is the CEO of OpenLogic, Inc., a provider of open source solutions that enable enterprises to acquire, support and control open source software. He has over 25 years of experience in the software industry, serving in executive roles at Information Management Research, American Fundware, and was a founding partner of Formation Technologies Inc.

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