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9/30/2004
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Red Hat Spending $23 Million For Ex-Netscape Security Solutions Business

Red Hat to incorporate Netscape Directory Server and Netscape Certificate Management System into products to help customers integrate desktops with a networkwide set of computing services.

Red Hat Inc. plans to acquire of the assets of America Online's former Netscape Security Solutions unit for $20.5 million in cash, plus another $2.5 million contingent on certain future customer orders being placed on or before April 30. As part of the package, Red Hat said Thursday that it expects to receive Netscape Directory Server and Netscape Certificate Management System.

Red Hat plans to start marketing these products as part of its Open Source Architecture over the next six to 12 months, the company said in a filing with the Securities and Exchange Commission.

The acquired software is expected to help integrate desktops with a networkwide set of computing services that up until now had only been available from a small set of proprietary vendors, the company said in a press release. Specifically, the addition of Netscape's software will help Red Hat offer single sign-on to multiple applications via its desktop operating system.

Netscape's software offered Red Hat the opportunity to purchase software that will help the company's desktop Linux strategy. Although open-source users have had access to Kerberos network-authentication protocol and OpenLDAP, Red Hat saw Netscape's software as a way to "leapfrog with an enterprise-class technology," says Paul Cormier, the company's executive VP of engineering.

Netscape Directory Server is a Lightweight Directory Access Protocol server that centralizes application settings, user profiles, group data, policies, and access-control information into a network-based registry. Directory Server is designed to simplify user management by reducing data redundancy and to improve security by letting administrators store policies and access-control information in the directory for a single authentication source.

Certificate Management System provides a security framework designed to authenticate the identity of users and ensure privacy of communications, a measure that's more secure than passwords, Red Hat said in a press release disclosing the proposed acquisition.

Red Hat's acquisition of the Netscape Security Solutions assets is expected to be completed in company's third fiscal quarter of 2004.

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