What's behind BEA's big bet on tools?
- By Jack Vaughan
San Jose, Calif.-based BEA appears to sense it may be time to turn its back
on the notion that tools should be completely independent of runtime software,
and it is now ready to push tools along with its platforms. It is also wagering
that Java needs a mainstream IDE to attract wider use. Thus, the firm is beginning
to promote its WebLogic Workshop software at the same time it shows diminished
interest in technical Java tools from Santa Clara, Calif.-based WebGain, a third-party
tool maker BEA helped fund, but which has struggled in recent months.
A number of traits have merged harmoniously, creating success for the WebLogic
server over the last few years.The BEA application server was fast, had an architecture
that impressed enterprise shops with transaction processing backgrounds, and
it adhered carefully to the new J2EE compatibility standard. With the Java application
server, the foggy notion of 'middleware' gained definition, and BEA's
WebLogic server was the most brilliant example.
It was a genuine hit, driving the company from $61.6 million in revenue for
the fiscal year ending January 31, 1997 (the year before WebLogic's acquisition)
to $975.9 million in revenue for the fiscal year ended this January 31.
But the fast-moving technology wheel always seems to offer new software poised
to unseat established successes, and BEA must now convince customers that its
Web services architecture bests or betters others. First estimates place it
in the thick of a Web services battle that does not - at least in the Java camp
- have a leader. Even as it seems to reach greater accommodation with HP, BEA
is encountering renewed competition from the likes of IBM, which, by some estimates,
may surpass BEA in the app server market this year; as well as Sun, which recently
began offering a free version of its iPlanet app server bundled with its flagship
BEA is not standing still. The tools and strategies the firm has put in place
for its next push forward amount to virtual 'bet-your-business' propositions.
But it is a difficult environment in which to execute.
Like all software companies, BEA faces tough economic going. Yet it recently
increased R&D spending. The limits to future growth, BEA's managers have
decided, are a matter of 'peopleware.' The key to gaining greater
share, they wager, is to expand the number of developers capable of deploying
distributed enterprise Java systems. In a tools battle that seems to boil down
to hardcore Java vs. .NET, BEA is set to provide an interesting alternative.
The emerging BEA strategy uncovers one aspect of the shiny Java language success
story that is a bit dark, at least for corporate developer groups. Despite incredible
growth, the number of Java developers still lags far behind the ranks of Visual
Basic and Cobol developers. It is disturbing that Java implementations continue
to increase in complexity, requiring higher and higher degrees of developer
In short, enterprise Java is still something of a specialist game for true
The tool that holds the promise to vastly expand Java use is BEA's WebLogic
Workshop, formerly code-named Cajun. The software is just coming to market,
about a year after the company acquired its originator, start-up Crossgain Corp.
of Redmond, Wash. Highly regarded as a development firm, Crossgain was composed
in large part of former Microsoft employees, including such notable Microsoft
tools gurus as Tod Nielsen and Adam Bosworth.
BEA and others hope the Crossgain crew can explode out of the gate with the
type of developer-friendly software Microsoft is known for.
Clearly, this will be a new era for BEA. Until now, noted Gartner Inc. analyst
Yefim Natis, BEA has focused on one major objective: selling application servers.
'They focused on just one goal. They refused to enter the development
tool market,' said Natis. 'They also avoided the integration market
and the messaging market, despite pressure. They only focused on new-generation
online transaction processing.'
BEA succeeded so well, 'because all their wood was behind one arrow,'
added Natis. 'But now they are paying for it.' Tools are just part
of the new push at BEA. The company has also recently upgraded its messaging,
portal and application integration offerings.
Its founders seemed to expect a lot when BEA was established in 1995, but few
industry observers shared such high expectations. Founders William Coleman (now
chairman) and Alfred Chuang (now CEO) came to the task with established credentials,
having served long stints at Sun Microsystems. (Edward Scott, a third founder,
worked for Pyramid Technologies and in the U.S. government. Scott now serves
BEA as a consultant.)
Coleman's and Chuang's first big move came in 1996, when BEA acquired the former
AT&T's Tuxedo transaction processing (TP) monitor group from Novell. If
observers expected the new owners to merely milk a proven technology, they could
be forgiven - but they turned out to be wrong.
With the purchase, BEA became one of the top 100 independent software firms,
garnering a 36% share of the worldwide distributed online transaction processing
(OLTP) market. That market might have been described as the high end of client/server
computing, then in something of a decline. BEA would be widely deemed the buyer
of mature (read: 'somewhat unexciting') properties, and the impression
was enforced in 1997 when BEA acquired DECmessageQ message-oriented middleware
and ObjectBroker object request broker software from the fast-receding Digital
Later, the company would buy NCR Corp.'s Top End transactional middleware product.
By 1997, the company had achieved a respectable $61.6 million per year in revenue
and gone public. It was a major enterprise middleware player, but that segment
was changing as Java came to the fore.
This string of well-executed mergers somehow set the stage for the greater coup
- the September 1998 acquisition of WebLogic Inc., the maker of an application
server then known as Tengah (named after a city located in central Java in Indonesia),
which was just gaining notice.
BEA's lineage in transaction processing influenced its decision to buy WebLogic,
which was far from alone in a diverse Java app server segment, said WebLogic
manager Scott Dietzen, who serves today as BEA's CTO.
He is well-known for helping to develop server-side standards within the Java
community, but it is less known that Dietzen worked as principal technologist
at distributed transaction processor maker Transarc prior to WebLogic. Dietzen
confided that he and WebLogic developers approached the problem of building
an application server as they would the problem of building a transaction processor.
He suggests BEA saw that trait, and looked to exploit it with its Fortune 500
commercial transaction processing customers like FedEx, United Airlines and
In conversation, Dietzen will remind you that the first wide interest in Java
was as a client or potential Web page animation architecture. He and a few others
saw it immediately as the foundation for a server architecture.
'Tuxedo was the high end of client/ server; [that is,] it looked more
like mainframe architecture,' Dietzen recalled. 'The Web made that
kind of processing architecture useful for everybody - not just a FedEx doing
more than 10,000 requests per second. Now WebLogic is a bigger product than
Tuxedo ever was,' he commented.
'WebLogic was a transaction processor. It was very well architected. We
had business-critical production in 1996. That was the reason BEA picked it,'
He added that the WebLogic app server 'had the reputation that it worked,'
and worked at a clip that satisfied newly converted C++ developers. 'It
was written in Java, but it was fast,' Dietzen said.
BEA deftly capitalized on this new acquisition. It kept the WebLogic team in
place, but supplemented it with long-time transaction hands. 'We put core
BEA Tuxedo gurus to work on hardening it. That gives it a different [lineage]
than other app servers,' explained Dietzen.
Said Eric Stahl, director of product marketing for WebLogic Server: 'BEA's
experience with Tuxedo made the move into the application server space a natural
fit. The vast amount of functionality [he points to load balancing, failover
and caching] is conceptually the same.'
Stahl also touched on a theme that resonates through several BEA purchases.
'BEA buys companies to get people, not products. While Tengah was a great
start, it was [about] getting the team in which we were most interested.'
Gartner's Natis also provides a take on how WebLogic became so successful.
'BEA came into the market with a good reputation for Tuxedo, at a time
when Java was suspect and not very proven in the enterprise. BEA came into the
picture of Java computing as an expert for the enterprise with an established
base,' he said.
And BEA benefited from gaffes among larger competitors, said Natis, who noted
that IBM's app server was often 'bought but not deployed until it reached
Version 3.45.' Both Oracle and Sun took missteps, fielding a variety of
server versions that were sometimes discontinued.
'For a while, BEA had very incompetent competition,' Natis said.
Just as competitors continue to work to better their engines, BEA is at work
on improving WebLogic. The measure of the work, as happened earlier in the database
server segment, is a stream of benchmark ratings for every new release. For
its part, BEA recently reported ECperf benchmark results for WebLogic Server
7.0 running on the HP 9000 rp8400 server that show the system was able to process
37,791 Bbops/min@Std (business operations per minute), and claimed a new ECperf
world performance record. ECperf is a standard for measuring the performance
of Java 2 Enterprise Edition (J2EE) servers.
Although it is often positioned as a high-end offering, BEA's Dietzen is quick
to point out that WebLogic's ECperf figures show a favorable total cost of ownership
(TCO). The price/performance result of the ECperf benchmark, representing the
TCO of the tested configuration, including all hardware, software and database
components, was $38/Bbops/min@Std.
Such performance has translated into leading, but challenged, market share
for BEA. Gartner, Meta Group, IDC and AMR are just some of the research groups
that put BEA on top of the application server world, followed usually by IBM,
Oracle and Sun. IDC, for its part, says the market will double to $4.4 billion
by 2006. Estimates like that ensure BEA will remain in the gun sights of the
biggest software players.
IBM's lucrative mainframe, integration and messaging software businesses continue
to provide inroads for the IBM WebSphere server brand. Several of the analyst
groups see the gap between BEA and IBM closing, while some project IBM will
surpass BEA in app servers this year.
BEA's Dietzen is not alone in asserting that IBM's WebSphere sales are tied
in with many big services deals, that Oracle is looking to sell databases or
application suites, and that Sun is looking to sell hardware. BEA app servers
run on many of the Solaris boxes Sun sells, so the relationship with Sun remains
one of 'co-opitition.' BEA has endeavored to forge deals with IBM's
services competitors such as Accenture, EDS and CSC, in an effort to counter
the Armonk, N.Y., software and services giant.
At the same time, BEA has launched its Workshop effort to ease the cost and
burden of integration. And it has sought to find the type of software bundling
that will have broad appeal. BEA's new WebLogic Platform 7.0 combines the core
app server with development, portal and integration frameworks so mainstream
application developers, not just J2EE jocks, can quickly build Web services.