Update: IBM to buy Gluecode

IBM on Tuesday continued its recent buying spree of small software companies, this time acquiring its first open source developer, a small startup with an application server IBM officials believe will serve as a low-end compliment to its WebSphere application server.

For an undisclosed sum, IBM has purchased Gluecode Software, a company of 18 employees that sells an open source server called Geronimo, which is based on open source technology from the Apache Geronimo application server. Gluecode has traditionally positioned and sold its software products and subscription support services as lower cost infrastructure to companies needing alternatives to the more traditional commercial software.

IBM not only sees Geronimo as the low-end extension of its WebSphere line, but as an opportunity to engage in a new business model that more effectively addresses the market needs of small and medium-size businesses.

“We are seeing a market shift happening and are trying to capitalize on that shift as well as contribute some energy and momentum we see in the open community. This deal also offers a new business model for IBM and WebSphere where you can download the code for free and then purchase software support on an annual subscription basis,” said Robert LeBlanc, general manager of application and integration middleware at IBM’s software group.

LeBlanc said the new business model better suits SMBs who often want to acquire a new technology quickly by simply downloading a product and beginning work immediately and side-stepping the delays sometime imposed by those executives responsible for procurement.

“This new business model plays very well to the low-end of the market but I don’t think we will carry it upstream to WebSphere. I don’t think it applies there, to be honest,” LeBlanc said.

In a related development, LeBlanc announced IBM is making a plug-in available for the Eclipse programming environment that will allow Eclipse developers to create applications that work with both Apache and Geronimo. The new plug-in is available for downloading as of Tuesday morning from Eclipse.

Because it is now a member of the WebSphere family, IBM intends to make the migration to and from WebSphere and Geronimo as seamless as possible, thereby letting small companies scale as their business grows. To ensure that, IBM is considering transplanting pieces of Geronimo inside of WebSphere, along with other pieces borrowed from the open source community.

“We have to ensure the apps users scale from low to high. We will look at utilizing pieces of Geronimo inside of WebSphere as well as take some of the capabilities the open source community is building and make a smaller, lighter weight kernel for WebSphere,” LeBlanc said. “Generally, though, because both are J2EE-compliant, compatibility is not an issue.”

Through the deal IBM plans to become a more active contributor to the Apache Geronimo open source project, according to a prepared statement released early on Tuesday, and plans to expand the existing community of developers to further advance the project. The company plans to contribute Geronimo-developed software to Apache Geronimo as well.

During the press conference on Tuesday Gluecode CEO Chet Kapoor said his company made two bets early on, both of which have paid off. The first was adopting J2EE for the open source market and the second was ascribing to a subscription-based business model.

“As a startup you get the luxury of making early bets, with one believing that J2EE was right for open source adoption. The path we took on open source was the Apache model based on meritocracy and the other was realizing users wanted a subscription-based model. We have seen IBM bet on this successfully with Linux and we think they will be successful in the J2EE space as well,” Kapoor said.

Financial details of the deal were not disclosed.