JBoss Boss Mum as Buyout Talk Grows Louder

Marc Fleury isn't talking, but sources say JBoss is about to be sold, making its founder a rich man and a hero to those following open-source business models.

BURLINGTON, Mass.—The buzz is growing: Middleware maker JBoss is for sale and is about to be acquired, possibly as early as the week of Feb. 13, for hundreds of millions of dollars.

In a Feb. 11 keynote address at an event hosted by the MIT Enterprise Forum of Cambridge, JBoss founder and CEO Marc Fleury deflected questions about reports of his companys acquisition by Oracle Corp.

But offstage, Fleurys reticence didnt slow talk of Oracles buyout plans among attendees familiar with terms of the deal and the open-source middleware developers efforts to find a buyer.

Fleurys speech focused on his companys history, not its future. During the event, titled "Charting Your Course Through Open Source," he described the open-source business models on which he built JBoss, and took a few shots at his competitors.

Fleury, who reminisced onstage about JBoss humble beginnings, is tied to a possible multiple acquisition deal in which Oracle acquires JBoss as the linchpin of the deal with its leading application server, Zend, as a development front end to shore up Oracles Java tools, and Sleepycat Software to round out a low-end open-source database play for Oracle.

Sources familiar with the JBoss deal valued it at about $437 million. Some sources estimated Fleurys cut of that sum at $100 million and others at substantially more.

Executives from different companies told eWEEK that JBoss had discussed possible mergers with them over the past year to 18 months. And sources said there have been at least two additional companies the application server leader looked to hook up with.

Sources said Novell, IBM, Hewlett-Packard, Red Hat, Oracle and BEA took hard looks at JBoss as a potential merger and acquisition target before Oracle made its offer.

/zimages/2/28571.gifClick here to read more about speculation that Oracle plans to acquire JBoss.

One executive who spoke on the record with eWEEK, Marge Breya, chief marketing officer at BEA Systems, in San Jose, Calif., said, "Weve been talking to JBoss over the last year. They were definitely shopping themselves for the last year. We had a number of different meetings with everybody but Marc Fleury," she said.

"Finally, we kind of looked at the range [of what JBoss wanted to be paid] and said we couldnt make it work. We said we could do something better with Apache and our blended strategy," Breya said.

The "something better" Breya was talking about is a lower-end application server model play akin to the one IBM has with its offering around the Geronimo application server, which IBM acquired when it bought JBoss competitor Gluecode last May.

BEA is pursuing a different strategy that involves integration with the Spring framework and other open-source components.

"The range they came to us with was $100 million to $200 million, nothing close to the 400-plus million dollar range," Breya said of JBoss. "The business model isnt there. And as for their community model, we didnt like the fact the model they were running was very closed."

Indeed, Breya said BEA had to question the purpose of taking in JBoss, another application server, other than to acquire the installed base.

"You have to look at why Oracle needs anther app server," she said. "They would have two app servers disconnected. Whats the revenue model other than the support stream?"

Next Page: What an Oracle acquisition would mean for JBoss, and for open source.