Quality can sometimes trump quantity. In the case of open-source software expert Red Hat
I'm talking about JBoss, the Java-based and open-sourced application server that Red Hat bought for $420 million last year. The best estimates available say that this product line brings in about $8 million of revenue per quarter, mostly in the form of service contracts and technical support.
But that rate may be changing as we speak. Red Hat says that its customers are adopting the middleware platform more readily these days, as it gets more integrated into the Red Hat Enterprise Linux operating system and the global support staff gets better at delivering high-quality services for this relatively fresh product line. In the last quarter alone, two (unnamed) customers spent more than $500,000 each on their new JBoss implementations.
That's not bad for a package that started life as a community-supported labor of love, created by hackers worldwide in their spare time. Then again, you can say the same thing about the Linux platform itself, or about Apache, the world's most popular Web server software.
When I worked with application servers -- before joining the Fool -- JBoss was an up-and-comer with a reputation for excellent performance if you tuned it right. It routinely outperformed rival solutions like Apache Tomcat and IBM
I'm out of that loop these days and can't speak to the next step in that process, but I'd be surprised if my former employers weren't using JBoss somewhere, at least for new application projects. Red Hat's corporate support makes a big difference to cautious IT managers, and these days, you can't really get in trouble for going with open-source software.
That's such bad news for Microsoft
JBoss isn't a make-or-break product by any means, but it does give the company a bit of extra firepower when negotiating platform contracts. Maybe we'll get the financial details on that segment next time -- management isn't sharing that information yet, and geeks like myself are just dying to know.
Microsoft is a Motley Fool Inside Value pick.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. He doesn't really miss his sysadmin days, but keeps himself nimble by hacking away at the Ubuntu box in his closet. You can check out Anders' holdings if you like, and Foolish disclosure looks great in a crimson capuchon, a scarlet skullcap, or a terracotta turban, depending on your cultural preferences.