LogicBlaze FAQ

The Deal

Q: Why is IONA acquiring LogicBlaze?

A: LogicBlaze brings IONA proven Open Source expertise. This acquisition provides us with an even greater number of resources to help accelerate the growth of our Open Source business and expand our capabilities to deliver the Open Source technology and corresponding enterprise-quality support our customers demand as they evaluate how best to incorporate Open Source into their SOA deployment strategies.

LogicBlaze is well known and well respected in the Open Source community. The company's founders are leaders in the Open Source community and its employees are committers and contributors on several of the most popular and widely deployed SOA-related Open Source projects such as Apache ActiveMQ, Apache ServiceMix (in incubation) and several others. The LogicBlaze team provides IONA with deeper expertise and committer access to these key projects, which will result in more efficient, superior support for our customers.

In short, the key assets as a result of this acquisition are: respected Open Source experts and leaders in the Open Source community (the people of LogicBlaze), intellectual property, and existing customers that have adopted Open Source technologies to support their SOA deployments.

Q: What are you paying for LogicBlaze?

A: Terms of the deal were not disclosed.

Q: What is covered under the terms of the acquisition?

A: We are acquiring substantially all of the assets of LogicBlaze, including technology, intellectual property and active customers. Additionally, all LogicBlaze employees are becoming IONA employees as a result of the acquisition.

Q: When will you complete the acquisition?

A: The transaction closed on April 6, 2007.

Q: What financial impact will the LogicBlaze acquisition have on IONA?

A: LogicBlaze's revenue model is based on subscription support offerings and consulting and training for the Apache ActiveMQ project and the Apache ServiceMix project (in incubation). The company has approximately 25 active customer agreements. Those customers become IONA customers as part of this acquisition.

Further, with this acquisition we are adding nine people and the associated overhead/office and other costs. When we report our first quarter earnings results on April 24, 2007 our guidance for the second quarter will include this as part of our total expense run rate.

Additionally, the initial effect on our revenue run rate is not significant at this point. That being said, we are extremely excited about this company and the accelerated growth opportunities it provides to our Open Source business initiatives. As we've publicly stated, a goal for any acquisition is that it be accretive in a year. Since LogicBlaze is an Open Source business with a subscription-based revenue model, we plan for this acquisition to be cash accretive within a year. We make that distinction since revenue recognition follows billings in a subscription model and is ratably recognized over the full contract period. For example, if a customer signs a one-year subscription, we recognize 1/365 of the contract value per day of the contract.

The Company:

Q: Who is LogicBlaze?

A: LogicBlaze provides business integration solutions based on Open Source technologies. The company was founded by integration architects with extensive experience as leaders in Open Source projects for integration, messaging, and enterprise service bus technologies.

LogicBlaze's mission is to extend innovation in business integration through:

Delivery and support of an Open Source SOA platform
Ongoing development of Open Source solutions that meet enterprise requirements for performance, reliability, and extensibility
Professional services and subscription-based support offerings
Commitment to the principles of Open Source development, including cooperation and collaboration with related Open Source communities and projects

LogicBlaze combines the innovation, quality, and total cost of ownership advantages of Open Source with the services offerings that customers need to enable organizations to successfully adopt, easily manage, and widely leverage Open Source solutions for business.

Q: Is there a current connection/relationship between LogicBlaze and IONA?

A: IONA's Celtix Enterprise Open Source ESB contains code from both the ActiveMQ and ServiceMix projects. IONA's Artix ESB also incorporates code from the ActiveMQ project. Our two companies know each other very well and are excited by the opportunities created by LogicBlaze becoming an integral part of our Open Source business going forward.

Q: How will IONA bring LogicBlaze's products/services to market?

A: IONA will continue marketing and selling the service subscription offerings for the ActiveMQ and ServiceMix projects for which the company is known and respected.

Operations

Q: Who and where are LogicBlaze's customers?

A: LogicBlaze's customers include leaders in financial services, government, and telecommunications industries. This is consistent and closely aligned with IONA's existing customer base.

Q: how do the industry and its customers perceive LOGICBLAZE?

A: LogicBlaze has an excellent reputation in the Open Source community and with its customers.

Q: Will LogicBlaze continue for any length of time as an independent company marketing their own offerings?

A: LogicBlaze will not operate as a separate company, but as indicated, will become an integral part of IONA's Open Source business. We are excited to welcome LogicBlaze to the IONA family and look forward to their contributions as we continue to build out our capabilities to provide enterprise-quality Open Source products, service and support to our customers as part of their comprehensive SOA deployments.

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