Gluecode Deal Could Expand IBM's Strategy

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

Charles Babcock, Editor at Large, Cloud

May 13, 2005

4 Min Read

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.

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.

About the Author(s)

Charles Babcock

Editor at Large, Cloud

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse University where he obtained a bachelor's degree in journalism. He joined the publication in 2003.

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like

More Insights