Double-edged blessings

The drive to create a Web community is only one area where BEA can potentially be thwarted by well-heeled competition. But that goes with being at the top of the enterprise software hill.

As the firm's Dietzen bemusedly puts it: "We are blessed with large and talented competitors."

In the past, competitor Oracle, in particular, turned very caustic and dismissive as it publicly cited benchmark and other data that called BEA's technical leadership into question.

At JavaOne in 2001, Oracle CEO Larry Ellison spent a share of his keynote needling and pestering BEA on such points. At the time, company head Bill Coleman quickly countered that Ellison's data was largely invented.

»1. Behind BEA's tool bet
»2. New focus on tools
»3. Double-Edged blessings
»4. Reliability key
»5. Colorado county user
»6. Analyst gauges tool move
»7. NCFE opts for WebLogic

Today, BEA's Dietzen asserts that Oracle's biggest challenge is in the application business. That is not a business BEA competes in, although the firm has seen important placements of its app servers in PeopleSoft and other ERP and CRM environments. Like others, Dietzen contends that Oracle "throws in the application server" as part of a bigger database or applications deal, but he is not concerned that in itself will be a long-term problem for BEA's sales efforts as, these days, "even Oracle has to improve revenue streams."

IBM has also been willing to engage in benchmark battles and some "BEA bashing." But a measured IBM view on threats to BEA's tools outlook comes from Rod Smith, distinguished engineer and VP of emerging technologies in IBM's Software Group. According to Smith, despite its big moves in tools, "BEA has to work on the breadth and depth of its tool coverage."

Chuang and company might counter that the deals forged with Borland and Rational will help meet this need. Smith's likely counterpoint might be that the IBM-sponsored Eclipse.org group would provide the most open means to extend tools. WebGain, the struggling independent tools company backed by BEA, is listed as an Eclipse.org member, but BEA itself is not affiliated with Eclipse.org.

Sun on the horizon
BEA's relationship with Java-originator Sun Microsystems has been especially complex. Many WebLogic app server implementations sit atop the Sun Solaris OS running on Sun hardware, which has benefited both companies. Along with IBM, BEA is a prominent Sun Java licensee. But after having ended its complex joint application server marketing relationship with AOL, Sun has made recent moves to renew its flagging iPlanet app server alternative. Gartner's Natis lists declining cooperation by Sun as one of BEA's upcoming strategic challenges.

But Natis, like others, somewhat plays down the threat of the "free" bundling of Solaris and iPlanet recently announced by Sun. On one level, app servers are becoming a commodity, but the effects should not be overstated. As enterprise application servers take on ever greater loads, require clustering and stick around long enough to need updating, viewers note, the importance of free app servers that amount to bare-bone loss leaders will diminish.

As BEA's Dietzen points out, the company is not only saddled with big competitors, it also has some big alliances. One watched of late concerns Hewlett-Packard. The two companies had a significant early marketing relationship that diminished as HP bought its own application server in the form of Bluestone. In the wake of HP's merger with Compaq, the future of HP's Bluestone middleware has been placed in question by its own executives. That added to the interest when HP and BEA in July announced new plans to jointly sell integrated software, hardware and services solutions featuring WebLogic on HP OSs.

Behind HP's move may be some hardware platform politics. The company gave up its own chip-making efforts to work with Intel on the Itanium processor, just coming to computer rooms after many years on the drawing board. One of BEA's biggest allies is in fact Intel, which hopes to unseat Sun Solaris and IBM AIX hardware servers using Itanium and its follow-ons as the means. BEA has expended considerable effort and expense to make next-generation applications run fast on Intel hardware.

Intel and BEA's partnership was on display earlier this year when BEA purchased Sweden's Appeal Virtual Machines, makers of the JRockit Java Virtual Machine. Intel also took a role in that deal, although those financial details are, as yet, undisclosed. JRockit is a server-side JVM that must deal with lots of I/O; it is said to address issues raised by Microsoft's retreat from "Wintel" JVMs.

"JRockit will bring outstanding performance for WebLogic applications on Intel 32-bit, 64-bit and other architectures," said BEA's Chuang. "WebLogic and JRockit fill a void left by Microsoft when they abandoned the JVM."

Said Gartner's Natis: "JRockit is a promising item. It could establish BEA as the leading provider of the Java runtime on Windows. That would be a great opportunity for a new marketspace for BEA."

Paying cost to be boss

BEA has been quickly forced into the role of big league player. But it has not proved shy about driving change. More barbs will come its way. Its WebLogic Workshop offering especially will come in for arrows from competitors that challenge whether it is truly standard Java. While BEA has tried to create a way of abstracting complexity without disrupting standard Java, Workshop must rely on useful, callable BEA-created components for handling some common but difficult Java programming tasks. In the loosely knit Java community, that is usually an ingredient for controversy.

For now, notes Gartner's Natis, "users must accept a proprietary level of coding, and a proprietary level of logic that works only with Workshop."

BEA has placed its Workshop-related extensions for consideration as part of the Java Community Process (JCP), but it will be a while before the prospects of those efforts are clear. In the long term, BEA must hope JCP will accept its now-proprietary extensions. "Here, people must now accept on faith that BEA will do well," said Natis.

Among the other things that must go right for BEA to further flourish: The new computing paradigm of Web services must flourish. "If Web services are a fad, than that's a problem," said BEA Workshop steward Nielsen.

As well, the company must do an excellent job of building out its developer communications infrastructure. At the same time, BEA has to continue to grow its channel business

Having reached nearly $1 billion in yearly revenue, said Gartner's Natis, BEA is a vendor at a crossroads. Getting to higher revenues will be difficult. BEA comes to its present position with some brave plans that, at the very least, help to make the software business interesting. In the end, corporate application managers and programmers will decide, as ever, if the products live up to the promise.

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