Will Red Hat Lose Powerful Friends with JBoss Buy?

By Peter Galli  |  Posted 2006-04-11 Print this article Print

News Analysis: Analysts weigh in on whether Oracle and IBM will now turn their backs on Red Hat, and what that might mean for HP, Novell and the open-source community.

Does Red Hats acquisition of JBoss for $350 million conflict with the very cozy relationship that has existed between Red Hat, IBM and Oracle?

Some analysts think it does.
"IBM and Oracle now clearly see JBoss as a major competitive threat and will be less likely to favor Red Hat going forward," said Scott Donahue of analyst firm Tier 1 Research, a division of The 451 Group.
"We also predict that there will be cultural clashes between JBoss CEO Marc Fleury and Red Hat CEO Matt Szulik going forward." But that deal is not necessarily bad news for Novell in the longer term, he said, since IBM would be "forced to move more rapidly to embrace Novell, and perhaps even acquire the company. Novell will likely benefit from the transaction in the longer-term, as it will continue to work with JBoss and will find more love from both Armonk [IBM] and Redwood Shores [Oracle]," he said. Click here to read more about how IBMs WebSphere challenges JBoss. But JBoss board member David Skok, who is also a general partner at venture capitalist Matrix Partners in Boston—an early investor in JBoss —told eWEEK in an interview that he did not believe the deal would have any impact on JBoss existing good relationship with Oracle. But he was a little less sure about IBMs reaction. "There is some risk with IBM and they may well take offense given that JBoss competes head-on with their WebSphere products," he said. Asked if any possible chilling of IBMs relationship with both JBoss and Red Hat concerned him, Skok said there is always a positive for every potential negative and the deal was likely to garner the combined firm more business from Hewlett-Packard. "I believe HP is looking for a single-stack provider that can help them synchronize releases and have just one place to point to for support issues," Skok said. "I expect HP to be very excited about this move and to put a lot more emphasis behind this stack than they would have done with the two vendors previously. They are also actually a bigger channel for Red Hat than IBM." But the business side of the open-source community is touting the deal as indelible proof that there is a valid business model around open-source software and that customers are willing to pay for those solutions. Click here to read more about open sources impact on the software industry. The deal also effectively disproves many of the comments that competitors with proprietary business models have made about Linux and open-source software, most notably that customers are not willing to pay for it, that these solutions are free and that there are no business models around them, OSDL (Open Source Development Labs) CEO Stuart Cohen told eWEEK in an interview on April 10. OSDL is also embracing the fact that both parties to this deal are companies with long open-source histories. Next Page: Keeping it in the open-source family.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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