JBoss Signs Definitive Agreement to be Acquired by Red Hat

Despite being a scientist, or more likely because of it, I am actually extremely superstitious. In December 2002, I wrote "Blue," or "Why I love EJBs," followed up by "White", or "Why I love Professional Open Source" in April 2003. However, I never got around to writing the third and final installment in the trilogy: "Red." Partly because I got lazy and partly because I always felt it wasn’t time to write it, the future I wanted to write about was still being defined. Red was intended to be a vision of the IT future, along the lines of Morpheus' quote in the Matrix:

"You take the blue pill, and you wake up in your bed and you believe whatever you want to believe. You take the red pill; you stay in Wonderland and see how deep the rabbit hole goes."

Today is the beginning of "Red;" we are going to wonderland and the rabbit hole keeps on going. Just like the Matrix protagonist wakes up to find “the real battle”, JBoss, Inc. today is stepping up to a bigger challenge by merging with RedHat. We chose a future in which I am proud to take part. Today we are announcing the signature of the definitive agreement. JBoss, Inc. will become a division of RedHat. I am staying on, reporting to RedHat’s CEO, Matthew Szulik, with direct responsibility for the JBoss organization.

Like all futures, its roots extend directly from the past. In "White," I wrote about how the Internet is the grandfather of free and open source software. The wave of commoditization started to roll towards IT infrastructure and the first impact was the operating system. In "White" and in my blog entry The Elephant and the Tiger, the focus is on market-leaders and master-brands and how hard they are to displace in open source. RedHat is our big brother. We walked in the footsteps of RedHat from a business standpoint, copying their subscription model and the Operations Network approach to scale our business.

RedHat emerged as the clear leader of the Linux pack, proving to the marketplace the viability and scalability of the subscription-licensing services format and that yes, you could build a good old-fashioned profitable business out of open source, whodathought?.

JBoss, Inc. has number one market share in middleware and we are blowing out our sales and growth forecasts. This is thanks to an amazing team with whom I have the privilege of working: your superior talent and spirit permeate our ranks. I want to thank you all, from the development teams who have transformed this industry through their innovation, to the sales and marketing team who've done an outstanding job educating the IT customer about the superior quality and savings that can be achieved with Professional Open Source products, to the support staff who are on the front lines every day proving to the customer the value of getting someone on the phone who really knows how to address their problems, to every last person whose work at JBoss has made this possible. Thank you not only to those in our company, but to those in the community who have brought us to the forefront of the industry through their support and evangelization.

Why take this step you may ask? When evaluating any major decision that impacts JBoss' future, I ask myself the following question: Which option will increase our chances of delivering on our mission to transform the way “we develop, distribute and support software”?

JBoss, Inc. had many options. I believe this will provide the best future for our community, our customers, our partners, our employees. Our investors and employees get instant-IPO liquidity, an IPO was possible and indeed planned but in this day and age of “Sarbannes-Oxley” the right M&A provides liquidity and reduces much of the risk. You have all worked hard and long hours and I am happy that this liquidity is coming your way, you all deserve it. Finally I want to thank the JBoss, Inc. team that has made this possible, Joe, Cary and Rob. I particularly want to single out JBoss’ COO, Rob “git’er done” Bearden. Rob, you were truly amazing and I am thankful for what you have done for the company.

Our partners will readily see the beneficial implications of this move. How many times I have heard you wish that we remain independent. In this rapidly consolidating and maturing industry, a pole will emerge around the open source pure play we represent. I believe this will strengthen our ecosystem as we merge with the Redhat ecosystem.

But I believe it is our customers that will benefit the most from this move. By remaining independent in a company with a shared mission and business model, you know our service to you will continue unchanged. We will accelerate the timeline of products. Consolidating the geographies of open source became a strategic consideration. We need to build the 21st century of open source and we need to build it fast and we need to build it aggressively. Joining ranks with RedHat increases our chances of success. RedHat and JBoss share a joint culture of pure-play open source. While different, our cultures are both centered around the mission of changing the industry through the development, distribution and support of free and open source software. We share a joint mission to put the customer squarely back in the driver's seat, by offering relief from "perpetual" software licensing pain, with the flexibility, choice and peace of mind that comes with highest-quality open source software, backed by highest-quality services.

The IT consumer need look no further. As every large player makes its move to create the open source stack of the 21st century, RedHat and JBoss, Inc. are making the first move and throwing their common hats J in the ring. We are THE independent pure-play open source company.

Before I close, I want to personally thank the team over at RedHat. I am looking forward to the opportunity to work with you all. Finally, thank you Matthew. In choosing the future of JBoss, Inc., besides the financial aspect, the trust I could establish with the leadership was personally very important to me. I guess I am old fashioned that way ;) Thank you for your mark of trust in us; you have bought yourself an elite corps.

JBoss, Inc. today makes me proud, very proud. I won’t lie to you, it is not without emotion that I signed those final papers on Friday night at 11:57PM, being very conscious that we were turning a page in our history. JBoss/RedHat tomorrow will achieve even greater things than we have done separately. The road ahead will bring challenges; the competition will react to this defining move. Make no mistake, we are all signed up for what lies ahead of us and I am personally relishing this adventure that is to come.

Onward,

marcf