JBoss Turns Open-Source Risk Into Business Opportunity

The ongoing SCO-IBM legal quagmire, as well as other Linux- and Unix-related patent disputes, have raised concerns among enterprise customers about using open-source software. Yet where many software vendors see a problem, JBoss, Inc. sees a business opportunity: The open source middleware vendor, with headquarters in Atlanta, Georgia, USA and Neuchtel, Switzerland, in 2003 began to offer indemnification to its customers.

Indemnification usually comes built into software licenses for commercial, closed-source products, but many open-source software licenses tend to pass liability onto users. This week, however, JBoss announced it would broaden its indemnification services to match the level of protection most commercial software companies provide to their enterprise customers.

Since it first offered indemnification, the company has seen an increasing number of Fortune 500 and Global 1000 companies deploy its JBoss Enterprise Middleware System (JEMS) in large-enterprise environments. As a result, JBoss found it necessary to upgrade its indemnification program to meet the needs and concerns of these customers.

"When you start becoming the standard environment for an entire enterprise, then the types of requirements that those customers place on you tend to be a little more stringent," says Brad Murdoch, JBoss vice president of services. "That's why we're stepping up to provide this level of coverage for our enterprise customers."

Murdoch claims his company's new indemnification plans are "dramatically different" and "much stronger" than those presently provided by other open-source vendors. In summary, JBoss will defend its customers against claims filed over their use of a JBoss product, or as an alternative, the company will modify the product's code so that it no longer infringes a copyright or patent claim. In either case, customers receive unlimited coverage.

If a court upholds a related damage claim aganst a customer, JBoss will also compensate up to four times the value of the customer's support contract. Other open-source vendors usually reimburse customers only up to the value of their contract, if they offer indemnification at all.

Prior to this week's announcement, JBoss also covered damage claims only up to the cost of each customer's support contract. The expanded program applies to new and existing customers who subscribe to the company's gold" and "platinum"-level support plans, as well as to all JBoss authorized service partners. JBoss has not yet detailed what other conditions, if any, may apply.

"Our customers are looking for a vendor to be able to stand behind their product. We're doing this in response to the demand from our enterprise customers, where they need a safety when they are using open source software and deployment," says Murdoch.

It would seem that vendors like JBoss could become de facto insurance companies for the enterprise open-source software market. Initially, this idea might sound like a plausible business, but any vendor, whether they deal with open- or closed-source software, needs to provide more than just legal and financial assurances. In this market, traditional customer service, support, consulting, and software development services still make the difference.

"We see ourselves as providing the complete, professional 'open source methodology.' JBoss has responsibility for delivering the code, not just an insurance policy," emphasizes Murdoch.

Indemnification is simply another service that customers expect open-source vendors to provide in order to compete against their closed-source counterparts. But customers aren't just looking for indemnification policies when they consider open-source products, and the long-term prospects for open-source software in the enterprise market won't rely solely upon vendors moving quickly enough to provide such policies..

According to Murdoch: "What we're seeing is that the combination [of] open source and our ability to rapidly innovate is very valuable to customers. The success of companies like JBoss, continuing to show that large enterprise customers can run their business on open source middleware, is something that is going to snowball in terms of adoption in the market."