September 16, 2004 12:39 PM PDT

BEA's new product chief regroups

Wai Wong says he can pick up where others left off.

As the new executive vice president in charge of products at infrastructure software maker BEA Systems, Wong said advanced research projects spawned by some of the company's departed technology executives will be used in BEA's current product line, rather than put off.

News.context

What's new:
BEA's new executive vice president in charge of products intends to fold advanced technology projects spearheaded by departed executives into BEA's current product portfolio, rather than shelve them.

Bottom line:
The company's product direction and reorganization are critical to the company's overall financial health--BEA is trying to stabilize itself following the flight of a number of top executives.

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Wong told CNET News.com that two projects touted by the company at its eWorld conference in May--a lightweight integration software product code-named Quicksilver and a mobile client software called Alchemy--have been incorporated into existing product groups. BEA's flagship product is WebLogic Platform, a suite of Java-based infrastructure software and tools for building and running business applications.

The Quicksilver technology, designed to ease integration of systems and improve application management, is being built into the WebLogic Platform. Alchemy is being "productized" and has also found its way into BEA's product development plans, Wong said.

"I don't believe at all that the intent is to say these are being pushed out or dismissed," he said. "Absolutely not."

Changing course
Wong's product decisions are important to the company's efforts to rebuild its product group and get on better financial footing.

The company last month reorganized its top management team in response to two disappointing quarters and the flight of at least eight high-level executives, some of whom had been setting the company's technology direction.

Following the reorganization in August, one of CEO Alfred Chuang's first moves was to bring on Wong as a new director of product development. Wong is taking the reins of an organization that has lost some of its top technical gurus, backers of cutting-edge initiatives.

Quicksilver was shown off at eWorld by BEA's former chief technology officer, Scott Dietzen, and Alchemy was the brainchild of Adam Bosworth, the former chief architect at BEA who took an engineering position at Google. Bosworth left the company in July, Dietzen in August.

On top of the departure of Dietzen and Bosworth, a number of other product marketing executives have left BEA, including former chief marketing officer Tod Nielsen. Another influential developer behind WebLogic, Cedric Beust, followed Bosworth to Google.

After only about a week on the job, Wong said his priority is to "optimize" development and delivery of products to BEA customers and maintain the company's reputation for strong technology. He said he will work with BEA veteran Mark Carges, who was named chief technology officer as part of the company reorganization. Both Carges and Wong report to CEO Chuang.

Wong, who was general manager of Computer Associates International's Unicenter systems management product, also said he intends to apply his experience in management and security to BEA's WebLogic line of Java server software. In the next version of WebLogic, the company has said that ease of administration and management will be one of the top priorities.

The product organization will also look for new hires in specific areas, Wong said.

"Do we intend to grow capacity? Absolutely. We will certainly be an organization that is going to continue to bring in top talent where we need to," he said.

Fear that the ship is sinking
Analysts who follow BEA have voiced concern over the executive departures and disappointing financials, which the company blamed on poor sales efforts. The company saw explosive growth in the late 1990s but has seen its revenue and profit growth cool substantially over the past three years.

"Not only were Dietzen and Bosworth leaders within BEA's development organization and within the Java community at large, but they played key roles in evangelizing BEA's technologies to customers," said Charles Di Bona, an analyst with Sanford Bernstein, in an August research note. "Their loss is likely to impact both development and sales efforts and morale in both departments."

Some analysts have said that unless it can expand revenue and profits, BEA could become the target of an acquisition. Indeed, during trial testimony around Oracle's hostile takeover attempt of PeopleSoft, Oracle indicated that BEA was one of its take-over candidates.

The internal tumult is perhaps the most difficult test that CEO Chuang has faced since he co-founded the company 10 years ago. Although Chuang is known as a talented engineer, he is currently trying to sort out major organization changes in an increasingly competitive field.

The employee departures appear to stem from an internal dispute over the company's direction, according to John Rymer, a Forrester Research analyst who follows the company closely. Some executives argued for a more expansive product strategy, which may have included large acquisitions to fuel growth, while Chuang favored organic growth through its existing product line, Rymer said.

Although BEA's technology gets high marks from customers, the company is seeing escalating competition, notably from IBM, Oracle and open-source alternatives.

The company's strategy has been to compete based on the technical strength of its software and collaborate with other companies, such as Hewlett-Packard, to deliver a complete package of software, hardware and services. Wong said BEA will continue to innovate to compete, rather than try to become a low-cost provider.

"The downward pressures from other products...their capacity or capabilities are not as rich and not as significant," Wong said, "especially if you look at the trends around ease-of-use development, deployment across the whole (Java) stack."

 

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