Open-Source Company Gets $10 Million In Funding

Stronger financial position will help JBoss compete with IBM and BEA in application-server market.
JBoss Inc., which provides technical support for JBoss Group's open-source application server, has secured $10 million in a first round of venture-capital funding from Matrix Partners and Accel Partners.

Accepting venture capital funding is a rare move for a company organized around an open-source project, and JBoss's stronger financial position represents a new level of competition for established technologies such as IBM's WebSphere and BEA System's WebLogic. Cygnus Solutions, a company based on commercial versions of Free Software Foundation tools, attracted $6.25 million in venture-capital funding from Greylock and August Capital in 1997; the firm was acquired by Red Hat in 1999.

Marc Fleury, a founder of JBoss Group and CEO of JBoss Inc., says the venture-capital funding comes "at a defining moment for the company" as it starts to penetrate the enterprise market. The firm supplies around-the-clock technical support for JBoss users who have implemented the free application server in a production environment. "Our business model is to make JBoss safe for commercial use," says Bob Bickel, VP of corporate strategy.

JBoss Inc. consists of 30 employees, 24 of whom are JBoss developers and contributors to the open-source project. Hundreds of additional developers around the world work on parts of the JBoss Group open-source project, he adds.

JBoss Group doubled its share of the application server market from 13.9% in 2002 to 26.9 % in 2003 and now ranks third after WebSphere and WebLogic, according to BZ Research. JBoss is embedded in systems sold by Apple Computer, Borland Software, Iona Technologies, Sonic Software, and Unisys, Bickel says.

With the new funding, the firm gains David Skok from Matrix Partners as a board member. Skok is the former CEO of SilverStream Software, former supplier of the Java application server, SilverStream. Novell Inc. acquired SilverStream in June 2002.

Bickel says the JBoss application server has been certified by Sun Microsystems as 100%-compliant for Java 2 Enterprise Edition.

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