Software // Enterprise Applications
07:11 PM
Connect Directly

Gluecode Deal Could Expand IBM's Strategy

Acquisition gets IBM into subscription support of open source, while taking on JBoss

At first glance, it looks as if IBM is cannibalizing its own product line with its acquisition of Gluecode Software Inc., a purveyor of an open-source software stack that competes with part of IBM's WebSphere software. But the deal gives IBM two key benefits: a competitor to the fast-growing open-source rival JBoss and a chance to generate subscription revenue for supporting open-source software.

IBM said last week it had acquired Gluecode, a small, privately held company that offers software and services around the open-source Apache Geronimo application server, for an undisclosed sum. Application servers are a key piece of Web-site middleware, since they allow applications to scale to many users.

The software stack that Gluecode offers includes the free Geronimo application server that theoretically could take business away from IBM's WebSphere commercial application-server software. However, JBoss, another open-source application server, already is eroding the use of WebSphere--and BEA Systems' WebLogic and Oracle's Oracle Application Server--among Java developers and in low-end production settings. The deal lets IBM offer a more-direct alternative to JBoss. "JBoss is exerting downward pressure on all application server revenues," says Nathaniel Palmer, chief analyst with the Delphi Group, a Perot Systems company.

An Open Book

IBM has selectively embraced open-source projects

Apache IBM was an early supporter of the Apache Web Server and bundled it into WebSphere in 1998

Linux IBM was the first major vendor to commit to supporting Linux across its server line

Eclipse IBM developed a programmer's workbench for internal use, then made it open source

MySQL IBM has been cool to this growing open-source database, which could threaten its DB2

JBoss This Java open-source app server is a direct threat to IBM's middleware; buying Gluecode gives IBM an alternative for companies considering JBoss

The other key element of the deal is the new revenue model for IBM. Gluecode charges a subscription for software support, integration certification, and related services. It provides an integrated software stack and, when a new version of Apache comes out, certifies that the software will work with Geronimo and other pieces on the version of Linux a customer is running. It's similar to the business model that open-source vendors such as Red Hat Inc. and MySQL AB use. This is the first time IBM will take a subscription approach to open-source support, an IBM spokesman says.

Geronimo remains a project of the open-source Apache Software Foundation, which will continue to shepherd its development. Palmer predicts that if the subscription-fee approach is successful, IBM will be able to take open-source software emerging from Apache and convert it more quickly into revenue through integration and support services.

Though Geronimo remains an open-source project, IBM can help shape its development. Many key Geronimo developers will become IBM employees in the Gluecode acquisition, and IBM will contribute to Geronimo's ongoing development. That hasn't been a possibility with JBoss, which has a company, JBoss Inc., backing the project and employing any developer crucial to JBoss' future. Hewlett-Packard and Novell last year partnered with JBoss and offer it in their customers' integration projects. IBM now has a way of responding without encouraging further growth of JBoss.

Gluecode is a small company--16 to 18 employees--that recently received $5 million in funding from venture firms Rustic Canyon Partners and Palomar Ventures. Developers who used to work on the JBoss application-server project founded the Geronimo project.

However, JBoss has a lead in the market. Shaun Connolly, VP of product management at JBoss, warns Geronimo users to watch for "a bait and switch" as they get started on an open-source-code application server but get pushed onto WebSphere. Connolly points to JBoss versions for hardware clusters and the ability to incorporate simplified Java programming called aspect management as areas in which JBoss is ahead of Geronimo.

Comment  | 
Print  | 
More Insights
Building A Mobile Business Mindset
Building A Mobile Business Mindset
Among 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps and it's past time for those with no plans to get cracking.
Register for InformationWeek Newsletters
White Papers
Current Issue
Increasing IT Agility and Speed To Drive Business Growth
Learn about the steps you'll need to take to transform your IT operation and culture into an agile organization that supports business-driving initiatives.
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.