Update: IBM's Gluecode Deal Adds A New Wrinkle To Its Open-Source Strategy - InformationWeek

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Update: IBM's Gluecode Deal Adds A New Wrinkle To Its Open-Source Strategy

By adopting Gluecode's revenue model, IBM will test the subscription services model of open-source companies such as Red Hat.

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 IBM has shown in the past it can both contribute to and profit from the wave of open-source code that's washing over the commercial software industry. With its Gluecode acquisition, IBM is trying to do it again, and adding a new revenue model in the process.

IBM said Tuesday it acquired Gluecode Software, a privately held company that offers software and services around the open-source Apache Geronimo application server. Terms weren't disclosed. Application servers have become a key piece of Web-site middleware, since they allow applications to scale to many users.

The software stack, or set of integrated parts, that Gluecode offers includes the free Geronimo application server that theoretically could take business away from IBM's WebSphere commercial application-server software. However, another open-source application server, JBoss, already is eroding WebSphere's use among Java developers and in low-end production settings. JBoss is taking low-end use away from BEA Systems' WebLogic and Oracle's Oracle Application Server as well. Now IBM can try to do the same, offering an IBM-supported, open-source 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.

IBM has successfully integrated open-source strategies in the past, such as making Linux available early on IBM servers.

What's different now is that by adopting Gluecode's revenue strategy, IBM for the first time will offer software support, integration certification, and related services on a subscription basis. In that model, Gluecode offers an integrated software stack, and when a new version of Apache comes out, it certifies it will work with Geronimo and other pieces on the version of Linux under which a customer is running it. That's been Gluecode's business model--similar to what Red Hat, MySQL AB, and other successful open source vendors do--and IBM intends to keep that approach, an IBM spokesman says.

Geronimo remains a project in the open source Apache Software Foundation, which will continue to shepherd its development. But many of the key Geronimo developers will become IBM employees in the Gluecode acquisition, and IBM will become a strong contributor to Geronimo's ongoing development. It had no such possibility with JBoss, which is both an open-source project and a company backing the project, JBoss Inc. JBoss Inc. employs 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 in 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. In buying Gluecode, IBM is getting an integrated stack of open-source software, a concept that Gluecode helped pioneer. It includes the Apache Web server, the Apache Derby database (originally developed at IBM), and the Apache Pluto portal.

The Geronimo project —which is now an Apache Software Foundation project —was founded by developers who used to work on the JBoss application-server project. So it's not surprising Geronimo is the closest thing in the marketplace to a look-alike to that JBoss offering.

However, JBoss has a big lead in the market. Shaun Connolly, VP of product management at JBoss, warns Geronimo users to watch out 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 where JBoss is ahead of Geronimo.

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