JBoss is going to get bought.
It's no secret that Oracle wasn't the only one sniffing after JBoss. Red Hat has talked about buying JBoss (though it's hard to see Matthew and Marc getting along well :-), as has IBM.
But Novell is the best fit.
Disagree? You think JBoss + Novell = NoBoss? Think it doesn't make sense, or won't happen? I think you're wrong.
Why Novell? Let me count the ways...
Novell has lots of cash. Too much cash, comparatively. (See right.) Marc Fleury wants cash. (Who doesn't?) Perfect match.
- Novell has struggled to convince enterprises to move from NetWare to Open Enterprise Server/SLES, though results have been improving under Ron Hovsepian. Still, the needs something else to attract and hook would-be customers. Ximian? Nah. There's no Linux desktop market, at least not now. JBoss could be the answer....
JBoss has a large (and growing) user base. The biggest thing it lacks is a solid business model to monetize all its demand. The company did less than $20M last year, and will probably ink $50-60M this year, if things continue as they have. Where's the problem, you say? A lot more money could be made if the company moved away from a pure support model toward something like what MySQL, Red Hat, or others use. Something that makes it easier for JBoss to convince customers to pay for software they already love.
- JBoss and Novell already have a strong, profitable partnership. Novell distributes JBoss' application server, having dumped its Extend app server. (This is exceptional irony, btw. Novell's SilverStream/Extend app server came from David Skok, who founded SilverStream, which Novell bought. David was the lead investor in JBoss' venture round...which company's product replaced SilverStream at Novell...and which product Novell is going to acquire into the fold. David wins every way he turns. :-)
- Marc could use some toning down. Novell could use some livening up. (Having said this, Marc, you shouldn't overlook the fate of every other CEO Novell has acquired into the company. They don't last, and I'm not laying the blame at either Novell's or their feet. They just don't last, for whatever reason.)
- Oh, and Novell has cash, and Marc would like to have cash. Did I mention that one? :-)
- Lastly, it's unlikely that Marc Fleury would want to be the CEO of a publicly-traded company. I'm not saying he couldn't do it. I'm saying he wouldn't want to. Marc is a free spirit. The public markets tend not to like free spirits. Much better for JBoss to make Mark gobs of cash without the hassle that comes with public accountability.
Convinced? Better prepare for it, anyway. It's going to happen.
The real question is what a move like this would mean for JBoss' employees. Marc owns 50%+ of the company. I believe VCs (Matrix and Accel) own another 30% or so. That leaves very little for the employees, who likely won't see much from a deal. Will they stay? Do they have the incentive to do so?
(Note: In the Novell-Ximian deal, no one but 3-5 top executives made much money in the deal, and yet most people stayed with Novell. So perhaps this stock incentive-thing is overblown, and it will have no effect on JBoss employees staying through the acquisition.)
P.S. Why did Bob Bickel leave JBoss?
Posted by Matt Asay on April 7, 2006 01:19 PM
