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IBM Expands Paid Open Source Strategy

UPDATED: IBM is making a bid on professional open source with the acquisition of privately held Gluecode, officials announced Tuesday.

Officials did not discuss financial and operational details of the merger, the first acquisition made by Big Blue of an open source company.

Gluecode's operations will be assimilated into IBM's software group and expand the company's WebSphere application integration middleware product line.

Officials plan to offer customers and business partners Gluecode's application server software and sell software and support services on top of the offering, as well as let customers upgrade to IBM WebSphere products.

The acquisition is intended both as an entry point for low-end businesses and larger enterprises to the IBM fold, according to Robert LeBlanc, IBM software group general manager of application and integration middleware. The hope, he said, is to get customers used to the free Gluecode software and start spending money on IBM software.

"It's a new business model that makes it much easier for customers to acquire the product early in the lifecycle of a project, use the environment and then, when they're ready, they can acquire support or they can move up to the higher end of the WebSphere product line," he said.

Chet Kapoor, Gluecode CEO, will spearhead IBM's efforts to get new customers to the new low-end WebSphere service, focusing not only on businesses within the U.S. and Europe but emerging technological countries like China, India and Brazil. As such, LeBlanc said, Gluecode's existing staff of 18 employees will be expanded almost immediately to meet the demand for the worldwide push.

Shawn Willett, principal analyst at research firm Current Analysis, said the acquisition is not so much a strategy to get low-end users to upgrade to the WebSphere platform but a move to cover its bets in different technologies, even though it creates redundancies in IBM's technology lineup. He said the company has a classic strategy of betting on all the numbers to end up with a winner.

"In the one sense, yes, Geronimo is a competitor to the WebSphere application server, but I think they saw it as a market that competes a little bit [with WebSphere]," he said. "But there are also people who are going to use open source J2EE and it's a completely different market, and they want to get a piece of that market, too."

Willett doesn't expect to see many people who sign up for the Gluecode offering to make the jump up to WebSphere, primarily because the two products exist in different markets.

"Open source people are just as likely to use some other platform for deployment or, more likely, just use Geronimo," he said. "This big linkage between Geronimo and WebSphere, it doesn't follow that people all of a sudden pay for software after getting the free Geronimo J2EE server."

The Gluecode software stack is comprised of three Apache Software Foundation (ASF) projects: Geronimo, an application server; Pluto, a portal framework; and the Derby database.

Gluecode Standard Edition also features the Jetty HTTP server and servlet container, ActiveMQ integration for messaging, centralized user management based on the Java Authorization Contract for Containers (JACC), clustering and centralized configuration.

The company uses a professional open source model to garner revenues and fund operations. After customers download the free software, Gluecode provides a subscription-based premium service for technical support issues and software updates.

The deal highlights an increasingly popular business model in a world where more and more companies are looking at the cost benefits of open source software but need the support that a paying customer would get in order to troubleshoot technical problems.

Companies like JBoss have based their entire business around the professional open source model. The company hosts a number of open source projects under its JBoss Enterprise Middleware Systems (JEMS) and makes money providing customer support and other premium services.

IBM's acquisition is a clear indicator of the success of open source software in the enterprise, said Shaun Connolly, JBoss vice president of product management. The move to acquire Gluecode's product marks a similar strategy taken by IBM and the industry to productize Linux, he said, this time targeting companies like JBoss.

"JBoss is similar in that it has mass adoption, a large ecosystem of people who have embraced the technology and its position in that Java middleware space, which really is a threat, if you will, to the WebSphere cash cow," he said.

LeBlanc doesn't see the acquisition as an experiment in professional open source, but more as a company meeting the changing demands of the market. Low-end companies, he said, have different requirements when they make decisions on purchasing new software.

"We're already the leader in the application server space and past that, we always want to continue to lead, so we're always looking for new and innovative ways to go to market and help customers solve their problems," he said. "We see this as just another extension of continuing that level of innovation.

IBM also announced Tuesday it would become an active contributor to the Apache Geronimo project and donate software features developed for Gluecode. Big Blue will also contribute code to the ASF that allows Eclipse-based tools for developing, debugging and deploying Geronimo-based software.

The Armonk, N.Y., company has already made inroads contributing code to the ASF. Last year, IBM contributed the code for its Cloudscape embedded database to the ASF. The open source organization took over management of the code in August 2004 and labeled it Apache Derby.