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Red Hat Doffs Checkbook For JBoss

By: David Utter

The deal could be worth as much as $420 million for JBoss provided they achieve "certain future performance metrics."

Initially, Red Hat (RHAT) will pay $350 million for JBoss, a maker of open source middleware solutions.

That amount includes $140 million in cash and $210 million worth of Red Hat stock. Should JBoss prove profitable under certain undisclosed provisions, another $70 million from Red Hat could be forthcoming.

The purchase will not change JBoss' support for multiple operating systems, nor will it limit customers to only using JBoss on Red Hat Enterprise Linux platforms. The existing JBoss subscription service as well as its user conference in Las Vegas will not be impacted by the acquisition.

Both companies believe the deal will help increase demand for both open source software and supporting services. Red Hat can offer a single source for enterprises to pick up the platform and the middleware needed for constructing service-oriented architectures.

"It is at Red Hat's very core to help unlock the power of open source and open communities to innovate across industries, geographies and economies," said Matthew Szulik, Chairman and CEO of Red Hat.

Red Hat cited research from Gartner, which placed a value of the Application Integration and Middleware and Portal (AIM) markets for license revenue at more than $6.4 billion in 2006.

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