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App servers in battle for OEMs

OEM deals have gained in significance for application server maker BEA Systems since it first brought the WebLogic server on the scene. The company will often herald its position as an independent app server vendor vs. database and applications house Oracle, as it pursues bigger and bigger deals with ERP and CRM stalwarts such as PeopleSoft Inc.

PeopleSoft, based in Pleasanton, Calif., became an OEM of BEA Systems in 1996 when it began embedding the Tuxedo transaction server in its enterprise application software suite.

PeopleSoft made the deal because 'we wanted to allow our customers to take full advantage of the standardization that the Internet was bringing,' said Paola Lubet, vice president of PeopleTools product marketing. Six years later, PeopleSoft continues to private-label Tuxedo, embedding the transaction managing software into its solutions 'to be sure that the power of the applications skies high,' she noted.

In September 2001, the relationship between the two companies deepened when PeopleSoft began embedding WebLogic into the Version 8 offering of its enterprise application suite. 'That [deal marked] our recognition of the underlying infrastructure of the Internet,' said Lubet. She claims PeopleSoft was one of the first major application software companies to provide recognition of open J2EE standards, and the fact that other companies are now entering into similar agreements with application server providers 'proves we made the right decision,' said Lubet.

Coupling WebLogic with PeopleSoft's Internet architecture provides a strong cost-of-ownership argument to potential customers 'because the work is already done for them,' explained Lubet. 'It's a pure Internet architecture. The customer doesn't need to install anything on the client machine. Everything is accessible from the browser. You don't need to train users.'

According to Lubet, PeopleSoft never considered building its own application server. 'We rely on the Internet infrastructure giants for those things,' she said. 'Our business is to leverage our business process expertise and bring a total solution to market that provides real value to our customers.'

In March 2002, PeopleSoft entered a similar deal to offer IBM's WebSphere. Today, PeopleSoft customers can select either WebLogic or WebSphere as their application server, with the choice most likely determined by their in-house expertise. 'A heavy IBM shop would probably choose to go with WebSphere,' said PepleSoft's Lubet. (Support for the app server portion of the suite is provided by the app server vendor, she noted.)

According to Lubet, since adding the WebSphere option, PeopleSoft sees no slowdown in demand for WebLogic. Although she would not provide a sales breakdown by product, she said PeopleSoft currently has 'close to 1,000 customers who are using our suite with an application server.'

PeopleSoft's application suite is based on a three-tier model. At the bottom is the application server infrastructure. Over that is PeopleSoft's own application development platform. The applications themselves reside on top.

To read ADT's special report on BEA software strategies, go to http://www.adtmag.com/article.asp?id=6562 and read 'What's behind BEA's big bet on tools?'.

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