IBM To Buy Gluecode Software

Terms of the agreement weren't disclosed. El Segundo, Calif.-based Gluecode has 18 employees, including key contributors to the Apache Software Foundation.

The deal represents IBM's first acquisition of a purely open-source software company. The move is designed to expand IBM's WebSphere application integration portfolio with an "entry-level" offering for small and midsize businesses, IBM executives said, adding that the company aims to extend Gluecode through the IBM Business Partner network.

The Gluecode deal increases IBM's stake in the Apache Software Foundation. Last August, IBM, Armonk, N.Y., donated to the Apache project an embedded relational database, code-named Derby, that can be integrated easily into Java applications. In addition, the acquisition gives IBM access to Gluecode principal Geir Magnusson Jr. and CTO Jeremy Boynes, key players in the Apache Geronimo project.

"We see a market shift happening for open source at the low end of the market," Robert LeBlanc, general manager of IBM WebSphere, said in a conference call on Tuesday. "We do well at the high end and are now extending WebSphere to reach the lower end of the market to address the requirements of departmental developers, SMBs and smaller ISVs."

Gluecode ships open and standard editions of its JOE Java-certified application stack and is readying an enterprise version of its platform for release this quarter. It's not clear when or if the enterprise edition of JOE will be made available since IBM is positioning Gluecode JOE at the SMB audience and intends to migrate users to WebSphere for higher-end needs.

The Gluecode deal also introduces a new business model for IBM, since customers will be able to download code and buy software support via an annual subscription. Like Apache, Gluecode endorses a BSD-style licensing model and competes directly with JBoss, which backs a GPL-based model, and Jonas, an open-source app server project backed by Red Hat.

Stephen O'Grady, senior analyst at technology research firm Red Monk, said Gluecode is the underdog in the category but gives IBM an open-source alternative to high-end commercial Java app server platforms--such as WebSphere and Weblogix--along with a stratified WebSphere portfolio of both open-source and commercial offerings.

So far, it remains unclear if IBM will continue to support MySQL as the stand-alone database currently included with the Gluecode stack or whether it will eventually move to push its Derby. O'Grady, however, said the two databases are "very different animals."

IBM Business Partners and open-source integrators viewed the Gluecode acquisition as a win for IBM and its partners.

"I think it's great news. The service-oriented business model has been working well for Gluecode, and IBM is lucky to get their talented software developers and open-source leaders," said Anthony Awtrey, vice president at Ideal Technology, Orlando, Fla. "IBM is looking at leveraging Gluecode's good relationships with the Apache group to its advantage. I imagine IBM would love to be in the driver's seat for Java and related development technologies, but they have to get out ahead of Sun [Microsystems]."

Shawn Willett, principal analyst at research firm Current Analysis, said Gluecode's software in some respects overlaps with IBM's lower-end WebSphere product, but that's not a problem. "This does compete with WebSphere Application Server, but IBM is once again taking the strategy of putting their money on all the numbers on table, thereby guaranteeing a winner," Willett said. "Open source will attract a different type of user and developer than would normally go for a commercial implementation such as WebSphere."

There's no doubt, though, that IBM is ramping up its competition with JBoss. In an e-mail response to questions about IBM's Gluecode acquisition, JBoss CEO Marc Fleury seemed unfazed. "Bring it on," he said.

BARBARA DARROW contributed to this story.