JBoss CEO Fleury Sets Record Straight On Company's Sale To Red Hat

The open-source vendor's $350 million agreement to be acquired by Red Hat, unveiled Monday, is not an exit strategy for JBoss executives but rather a vehicle to accelerate the company's growth, said Fleury, who will head Red Hat's new JBoss division.

JBoss was rumored to have had discussions with Oracle and other large ISVs with interests in Linux and open source.

"We never shopped the company actively," Fleury told institutional investors gathered Tuesday at Red Hat's headquarters in Raleigh, N.C., for a briefing on the companies' plans. "We had incoming requests, and I wanted to choose. Our customers and partners are very relieved JBoss is today at Red Hat, and what we're doing here is creating the largest independent company of infrastructure software and open source."

Fleury noted that JBoss will be run as an independent division of Red Hat and will retain its "independent spirit."

The deal benefits both parties by accelerating Red Hat's service-oriented architecture strategy and giving JBoss deeper pockets, a global services reach and the fiscal maturity to expand its business faster than it could alone, according to Fleury.

The marriage of the two companies will enable JBoss to grow its assets and investment in technology and people, Fleury said. Since 2004, JBoss has enjoyed triple-digit growth and increased its employees to 196. Going public was an option, but JBoss saw a faster path to success and making acquisitions, he said.

"Managing a public company would make our investment capacities limited," Fleury said. "Joining a company like Red Hat gives us a financial runway."

He said JBoss was always committed to the open-source philosophy and hinted that the company had no plan to sell itself to a proprietary vendor.

"We see a lot of dynamics going on. We're throwing our common hats in the ring. Red Hat is making a decisive move and taking the initiative in forming the first nuclear, 21st [century] software company by embracing open source as a way to transform the way we distribute, sell and support software," Fleury said.

"It's not an exit [but an entrance] into something brand new, but we had to focus on the next step of execution," he added.

Under the acquisition deal, JBoss is eligible for another $70 million in compensation based on its bookings, which are roughly equivalent to billings, Red Hat said. The agreement is expected to close around the end of Red Hat's fiscal first quarter in late May.