Red Hat signs up for $420m Jboss acquisition

Red Hat has agreed to acquire privately held open source middleware vendor Jboss for $420m. 

The Linux distribution vendor said that it expects deal to help the company accelerate the shift to service oriented architectures on open source platforms.

"This announcement is focused on the infrastructure part of open source," JBoss chief executive Marc Fleury said in a conference call.

Jboss is best known for its open source Java application server, but also offers a slew of middleware applications including a portal and messaging server.

Red Hat introduced the Red Hat Application Server in 2004 based on the Java Open Application Server (JoNAS) open source project that competes with the Jboss software. 

Red Hat chief executive Matthew Szulik said in the conference call with investors that he expects his company's work on JOnAS to continue. He declined to comment on how he plans to integrate the companies' product lines.

The Linux vendor already offers several middleware products including a directory and identity server. Red Hat's range of middleware products is mostly based on the Netscape Enterprise Suite that the company acquired from AOL in October 2004.

The acquisition strengthens Red Hat's position the world's leading as open source software vendor in its quest to build a portfolio of products for any possible applciation, said Jonathan Eunice, a principal analyst with Illuminata.

"Red Hat is the go-to provider, and has good prospects of remaining so," he wrote on a company blog.

Red Hat and Jboss have similar business models of selling maintenance services to open source software, prompting the companies to say that the deal would be a "shoo-in" for partners and customers.

The acquisition price will be paid 40 per cent in cash and the remainder in Red Hat stock. Approximately $70m is subject to the achievement of future performance goals.