ACADEMIA

Red Hat, the leading Linux distributor, said today it will acquire open source middleware company JBoss for an initial $350 million. Red Hat said in a statement the transaction consists of 40 percent cash, with the balance in Red Hat common stock. Red Hat will also pay about $70 million more if certain performance metrics are achieved. The acquisition is expected to slightly decrease earnings in the August quarter, and be neutral for the full fiscal year. The deal is expected to add to earnings in the next fiscal year. Red Hat Inc.'s shares jumped on Monday as the market enthusiastically greeted the proposed deal. "Red Hat and JBoss are fully aligned around the belief that the open source development model continues to change the economics of enterprise IT in favor of the customer, and we truly believe in the potential of software innovation, once freed from the fetters of proprietary development, " said Matthew Szulik, Red Hat chairman and CEO. JBoss, headquartered in Atlanta, Georgia, has been one of the pioneering companies that pursued a professional open source model with applications that are targeting especially medium-sized and large enterprises. The firm's software is built around Sun's Java EE and currently is focused on "JEMS" (JBoss Middleware Enterprise Middleware Suite), which includes application servers, databases, portal software, process management, transaction and management applications as well as developer tools. "By acquiring JBoss, [we] expect to accelerate the shift to service-oriented architectures, by enabling the next generation of web-enabled applications running on a low-cost, open source platform," Red Hat said.