Customers happy with Red Hat/JBoss connection

Vendors sometimes say "synergy" before an acquisition. But a customer saying it afterward? Did one of these deals actually work?

In April of 2006, Red Hat acquired open-source J2EE application server vendor JBoss for $420 million. According to previous reports, Oracle was interested in buying JBoss earlier that year for more money, but Red Hat beat them to the punch. A year later, what does the new Red Hat landscape look like for Linux and JBoss customers?

Customers seem to like the acquisition, since many Red Hat customers were already JBoss users and can consolidate their vendor base with ease. Red Hat now offers a single subscription product, Red Hat Application Stack, that includes JBoss and Red Hat Enterprise Linux, along with the Apache Web server, the PHP and Perl languages, and the open-source databases MySQL and PostgreSQL.

“When we ventured on the path of building a Sales Workstyle Management solution a few years ago, we decided to build the solution using open-source technologies,” says Anupam Singh, CTO for Landslide.com, a provider of a sales force software solution in Pittsburgh. “We chose Red Hat over other Linux distributions for time to market and efficiency and also their close relationship with the hardware we are using. We chose JBoss as it also bundled other complementary technologies while keeping our architecture and solution vendor neutral."

Like Landslide, others had independently chosen JBoss before the acquisition. “The decision to use JBoss was made independently of the decision to use Red Hat Linux,” says Rob DiMarco, vice president of software for Health Market Science (HMS) a revenue enhancement and recovery services provider to government healthcare programs and others in the healthcare industry. The 7-year-old firm switched completely to Red Hat in 2004 for the stability and reliability of Red Hat’s Enterprise product line and the support from Oracle and other vendors for the platform.

As the acquired company integrates into Red Hat’s offering, customers are beginning to see the fruits of the deal. “Until JBoss was acquired, they [Red Hat] couldn’t quite give you end-to-end support. Now with their Linux support and this application server, they have a new profit center and a one-stop vendor for both explains John Engate, CTO for Rackspace, a leading managed hosting provider based in San Antonio, who uses both Red Hat Linux and JBoss . Rackspace, like many Red Hat customers, not only uses JBoss, but also services customers who use it.

“As a service provider, our goal is always to provide customers with the products and services they are asking for the most,” Engate explains. “In this case, we chose Red Hat primarily because it is the most widely used Linux distribution available. Red Hat’s Linux offering is, more or less, the standard for Linux in the enterprise. JBoss was the best alternative to the much more expensive J2EE application server products like BEA Weblogic and IBM WebSphere. Many of our customers were asking us for JBoss support.”

“We believe that the acquisition of Red Hat is advantageous,” Engate adds. “Red Hat has been an excellent partner for us, and we believe that their experience in developing a productized Linux offering will help them to improve the current offering from JBoss. With Red Hat bringing JBoss into the fold, it will make it that much easier for Rackspace to support its customers on the JBoss platform. A single vendor is easier to work with than two or more, and with more of the stack under Red Hat’s support umbrella, it should help with support escalations with less potential for finger pointing between vendors.“

The idea of a single vendor is not just appealing to Rackspace, but many others as well. HMS found the vendor standardization to be quite attractive to their already steady business with Red Hat’s Linux. “Any time we can standardize to a single vendor, it can simplify our management and procurement,” DiMarco says. “Going forward, I think the JBoss acquisition will have advantages for our use of Red Hat. One of the biggest advances I hope for is the JBoss Application Server release process will model closely the Red Hat Enterprise Linux release process with less frequent, but more stable, releases.”

“For our business, I think there are huge synergies here,” Landslide.com's Singh says. “Landslide is a hosted/[software as a service] solution. We need the hardware, [operating system], server and application technologies to work 24x7 and our solution [to] be always available. When we do run into issues, we rely on the vendor experts. When you build very large-scale solutions like ours, it becomes critical that the hardware and technologies play nice. With this acquisition, we have one less variable to worry about in such instances.”

In addition to vendor consolidation, many believe that overall reliability will improve with the two products in their IT portfolio.

“JBoss is the premier open source J2EE application server, and compares favorably against the commercial competition,” DiMarco says. “Because it is open source, we have tremendous insight into the inner functions of the application server, allowing faster debugging times for our development team."

This debugging adds reliability by drawing from one line of support service. One vendor source means one stream of support to service. This can translate into a competitive advantage for scalable technology in mission-critical applications. “It was also important for us to get top notch support so that our customers could use our product 24/7,” adds Singh. “I want Landslide to focus on building the solution and rely on our vendors and partners to provide robust, scalable technology.”

Some believe that it is important to preserve the development team that produced the acquired company and their offering. “It has always been my feeling that JBoss was more a loose confederation of open source projects, which was a successful development model for them,” adds DiMarco of HMS. “Now as part of a larger company I hope JBoss will be able to maintain the core team of developers. My concerns are reduced when I see inventive new releases such as the recent Hibernate Shards and Search projects.”

Singh adds that an improved body of knowledge emanating from one source has its cost benefits also. “This will be beneficial for the user community at large. I am hoping to see talent with greater depth and expertise in JBoss,” he adds. “It would also be nice to see the synergies translate into packages that will lower the total cost of ownership of these technologies.”

“We have only had to leverage support a couple of times in the past three years and also used JBoss's support sparingly,” Singh says. “We have been very pleased with their responsiveness and knowledge. I also hope that this acquisition will increase the pace of innovation and also the footprint of their installed base.”

Rackspace's Engate summarizes the five acquisition benefits:

1. Potential simplification of pricing.

2. Patches tested and delivered through one unified mechanism (Red Hat Network).

3. Combined and aligned product road maps.

4. Better technical support and more engineering resources (bigger budget).

5. Support by more third-party software vendors (monitoring, management).

Red Hat continues to face a changing competitive environment and has a proactive posture despite a changing competitive environment.

In October of 2006, Oracle announced that it would offer its own version of Red Hat Linux with support. Hard to tell if Oracle’s move is truly a threat, however, the pulse of the industry seems to indicate that it was anticlimactic. While Red Hat’s quarterly revenues were a bit sluggish relative to the same period last year, its profitability improved. The company continue to play its own chess game in the open source marketplace by contributing to the community, and focusing on excellent reliability, testing, support and continued development.

In mid-March of 2007, Red Hat released Red Hat Enterprise Linux 5. This is part of Red Hat’s strategy to maintain its position in the open source and Linux market. On the tail of the JBoss announcement Red Hat also announced that it would double its research and development investment in JBoss.

“I don’t think anybody sees the JBoss acquisition as a negative thing,” Engate says. “The only ones who might see it as a negative are their competitors.”

Learn more about this topic

Analysis: Red Hat's JBoss buy may benefit Novell, other players04/10/06JBoss head Fleury quits Red Hat02/09/07Fleury: JBoss to scale its business

04/12/06

This story, "Customers happy with Red Hat/JBoss connection" was originally published by LinuxWorld-(US).

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