Related: Analyst gauges tool move

In the dog-eat-dog software world, BEA Systems Inc. has hit a critical crossroad. The San Jose, Calif., firm is approaching the $1 billion sales mark, reached on the back of a hot product (WebLogic) in a hot market (application servers).

As the market matures and products become commodities, new revenue sources become essential. This explains BEA's move into the tools business utilizing technology acquired last year with Crossgain of Redmond, Wash.

»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

Longtime BEA watcher Michael Gilpin, an analyst at Cambridge, Mass.-based researcher Giga Information Group, said BEA's move to abandon its investment in and agreement with Santa Clara, Calif.-based WebGain for development tools is a good one that should have occurred earlier. "BEA has already lost momentum, mostly due to a change in the market but also due to execution. Now BEA has recognized that they can't rely only on application server leadership to be a platform leader. They need to be a broad platform solution provider," noted Gilpin.

Gilpin said his firm has "been making this recommendation for a long time. There still is a distinct class of customer that prefers specialized tool vendors, but for the most part the mainstream market is looking for a comprehensive solution." And that 'distinct customer' was not turning to the WebGain tools offered by BEA as an add-on, "which tended to lose out against other tools like JBuilder," he noted.

BEA's investment in WebGain was "a mistake from the start," he said. But "they have learned from that mistake. The decision was also a cultural phenomenon. Adam Bosworth and Tod Nielsen come from a background as mainstream tool builders. And as BEA moved to the mainstream tool market, it was looking to appeal to a wider audience."

About the Author

Mike Bucken is former Editor-in-Chief of Application Development Trends magazine.

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