June 24, 2002 9:01 PM PDT

BEA angling to remain a top contender

BEA Systems hopes to fend off rivals with the release of new e-business software and a renewed sales partnership with computing giant Hewlett-Packard to sell its products.

BEA later this month plans to release new e-business software that combines the company's three separate WebLogic products into an all-in-one package, according to company executives. BEA will also release WebLogic Workshop, a visually oriented Java tool, developed under the code name Cajun, that allows programmers to build Web services by pointing and clicking rather than having to write software code, executives said.

BEA executives said Tuesday that the company also plans to announce a stronger partnership with HP, in which the two companies will jointly sell and market each other's products. HP, which has been losing money with its software efforts, recently announced plans to stop selling its own family of e-business software and instead partner with other software makers to satisfy its customers' software requirements.

"BEA will be the default (software) platform for all HP hardware," said Eric Stahl, BEA's director of product marketing.

Analysts say BEA's new e-business software package and tool, along with the HP partnership, is a needed boost for the software company.

BEA is the market share leader in the $2 billion market for application-server software, technology that runs e-business and Web site transactions. But the company's dominance in the market has begun to waver with stepped-up competition and market share gains from IBM and Oracle.

Sun Microsystems--which ranks fourth in the market with 7.9 percent share, according to research firm IDC--recently took a shot at stealing market share from BEA by offering its low-end application server for free as part of its Solaris 9 operating system.

"BEA needed to pull something big out of the bag to show it can consolidate its position as a market-leading infrastructure provider. This could be it," said James Governor, an analyst at advisory firm Illuminata. "HP means a volume opportunity, and this deal certainly lessens the impact on BEA of Sun's recent announcements regarding free (application) servers."

BEA controls 34 percent of the application server software market, followed by IBM with 31 percent, according to a recent study by research firm Gartner Dataquest. But with the differences between products in the market disappearing, software companies are now focusing on selling other products that run on top of application servers. This technology includes integration server software, which connects dissimilar business software together, and portal server software, which allows companies to create portal Web sites for employees and customers.

In the category for bundled application servers, which includes the sale of portal and integration servers, IBM led the market with 33 percent, followed by BEA with 24 percent, Oracle with 12 percent and Sun with 8 percent.

BEA's new WebLogic Platform integrates three products into one: its application server, integration server and portal server. Oracle and IBM executives say their application servers already include tight integration with portal and integration technology.

BEA will charge $90,000 per processor for its combined WebLogic Platform product. While BEA customers can still buy the products separately, the company is offering a pricing incentive to those who want to buy all of the products at once, Stahl said.

BEA has a long history with HP. Before HP's own foray into the e-business software market, HP sold BEA's products, Stahl said. In addition, HP earlier this month said it would support BEA's application server software with new servers using Intel's Itanium 2 processor.

With WebLogic Workshop, BEA is also expanding its target market beyond traditional Java-savvy developers in information technology departments to less-skilled programmers in business units that need to quickly develop software. By making Java coding easier, BEA executives believe WebLogic Workshop will open up Java 2 Enterprise Edition (J2EE) development beyond the estimated 3 million Java developers to as many as 11 million potential customers. J2EE is the Java standard for writing business software.

The tool allows programmers to build Web services, which comprise software that allows companies to interact via the Internet. Java proponents such as Sun, BEA, Oracle and IBM support the Java standard, while Microsoft supports its own Web services technology called .Net.

Earlier this year, the tool stirred debate in the Java community when BEA released a test version. Some competing software makers have charged that WebLogic Workshop could break the "write once, run anywhere" promise of the Java language, in which every Java program could run on any operating system or piece of hardware that supports Java. But it is an accusation that BEA executives--and analysts--have disputed.

For BEA to build an easy-to-use tool, the company had to include new commands that are not yet part of the standard Java language. The tool also includes technology that allows programs to automatically run on BEA's application server. BEA has since submitted the new technology to the Java standards process and to allow its rivals to use the same commands in their tools.

In related news, BEA will also release a new Java Virtual Machine (JVM), a piece of software that lets computers run Java programs.

 

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