Simon’s Blog

RedHat will pay between $350 and $420M in a mixture of cash and stock to acquire JBoss. Seems like a pretty solid result for the shareholders (founders, employees and VC investors). It’s always interesting to see what these type of companies sell for, not least because the valuations the companies achieve gives us some real insight into how they’re performing.

In particular, I suspect RedHat would value a company like JBoss based on its revenues. So, the valuation the JBoss team achieved gives us a clue as to their current revenues. Based on what RedHat are paying, my guess it that JBoss is looking like pulling in between $50M-$60M in revenues this year/next year. That’s not bad going. I wonder how much it can grow, and what really RedHat adds as far as JBoss customers are concerned. Time will tell on that one.

Update:

The rumour (possibly unfounded) is that JBoss founder Marc Fleury owned about 50% of JBoss at the point it was acquired. That’s certainly possible, given that investing in JBoss was seen as a hot deal by the VC community, so they might well not have been able take as much stock as they’d have liked. That makes Fleury about $200M richer, assuming everything pans out through whatever lock-up period he has to endure.

There’s been lots of talk about app server vendors quaking in their boots at this development. I’m not sure I see why. Speaking as a Java EE app server user, it makes no difference to me who owns JBoss. Being owned by RedHat doesn’t influence my choice to use, or not use, JBoss in any signficant way; and if anything, it’s a slight negative for JBoss because I don’t believe JBoss is going to become a lower-cost option under RedHat, given that RedHat has the reputation of being expensive (some would say overpriced). I think this is an opportunity for Sun’s GlassFish project to gain some mindshare.