Board Member Reflects on JBoss Success

By Peter Galli  |  Posted 2006-04-12 Print this article Print

David Skok, a venture capitalist and JBoss board member, discusses the company's history and its quick rise to financial success.

When David Skok, a general partner at Matrix Partners in Boston, first heard about a company called JBoss, he was interested, mostly because he had also founded a company in the application server space, Silverstream Software, before becoming a venture capitalist.

But Skoks interest sharpened when some of the companies Matrix had invested in told him they were surprised by the high quality of the JBoss application server software.
"So, I started following the company and, in September 2003, we got word that JBoss was looking for outside financing for the first time. The second I heard that, I jumped on a plane and flew down to Atlanta and pursued the deal very aggressively," Skok told eWEEK.
"We were lucky and [JBoss CEO] Mark [Fleury] chose us and it has been a phenomenal and very exciting relationship since then. We raised $10 million and it finally closed in February of 2004. We participated in that funding, ended up with a board seat and got really involved with the company," he said. Click here to read more about Red Hats acquisition of JBoss. The JBoss that existed in early 2004 was nothing like the company that was sold to Red Hat for $350 million on April 9, 2006. At that time, JBoss had a staff of about nine and Matrix helped build its management team as well as understand the challenges the company would face as it grew. The fact that JBoss already had a big community at that time was exciting, as this meant there was a good chance to create positive sales. "It was exciting to find a company with a clear community and potential base of customers coming to them, since the cost of trying to get customers is incredibly high for most software firms," he said. Skok also helped the company build what he calls its sales and marketing machine. "When I first arrived, they had five million downloads, but they had not captured a single one of those names," he said. "While they were making $27,000 a month selling their documentation, I wanted them to give this away if users would give us their e-mail addresses. It took them a while to accept that reasoning, but once they did, tens of thousands of leads from qualified people telling us what they were doing started pouring into the company," he said. But that was not without its own challenges. Turning all of these over in a month was not possible, so they had to figure out how to score and weigh which of these might actually be worth following and potentially turn into a paying customer. Developers see Red Hat and JBoss as a good fit. Click here to read more. Then, they had to look at what kind of sales force to build, how to keep the costs low and shorten the sales cycle, Skok said. Asked if Matrix could have predicted that JBoss would be such a financial success at that early stage, Skok said that Matrix was pleased with the return on investment and "very happy" with the outcome. But there are very few companies that are likely to match JBoss financial success story, he cautioned, although he added that there are some exciting companies working on technologies for other parts of the stack. Once Red Hats acquisition of JBoss closes, Skok will lose his JBoss board seat, but may well continue to advise the firm on an informal basis. But Matrix will become a Red Hat shareholder, receiving a partial cash payment for its JBoss stake and the balance in Red Hat stock. Check out eWEEK.coms for the latest open-source news, reviews and analysis.
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


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