BEA World hints at trials ahead for Java vendor

Software vendor must reinvent itself in a market it once pioneered

By Elizabeth Montalbano, IDG News Service, 10/03/05

October 3, 2005—Times have changed for BEA Systems. Once the brash darling of the Java application server market, the software vendor put forward a more humble face at its annual BEA World show in Santa Clara, California.

Gone is the luxury of taking the top market-share spot in a lucrative market, the confident attitude of a company that knew it was on the right track, and the bustling activity of customers and partners jockeying for a piece of the magic.

In its place is a perilous second-place slot in a market that is becoming increasingly commoditized by open source, an opening-day keynote by a CEO who encouraged customers to place BEA software alongside competing products the company once spurned, and a handful of partners—primarily emerging software vendors—touting their wares on a trade show floor that was about half the size it was during the height of BEA's success.

Far from being the leader it was, BEA is now in the humble position of reinventing itself as it plays also-ran to much larger companies in a market it pioneered.

"Between a rock and a hard place," is how Dana Gardner, principal analyst for Interarbor Solutions, described BEA's current predicament. While the company continues to have strong technology and a loyal install base, it's unlikely BEA will ever recover completely from losing its prominent position in the Java application server market to larger companies like IBM and Oracle.

Also posing a problem for BEA is the increasing adoption of open source software, notably from JBoss, to do the job of BEA WebLogic Server, which remains the primary source of revenue for BEA.

Ironically, the biggest Java announcement on BEA World's first day had nothing to do with BEA itself. On Tuesday BEA rivals JBoss and Microsoft surprised the industry by announcing a partnership to optimize their software to work better together.

What appeared to be a ploy to upstage BEA didn't dampen the San Jose, California-based company's attempt at the conference to tout a strategy for making applications in IT systems "liquid" by using new software called Aqualogic. The company is developing this new product line to work with software that runs in a distributed fashion, called service-oriented architectures (SOAs) by BEA and others in the industry.

During a keynote, BEA Chairman and CEO Alfred Chuang said that BEA's vision is to provide the SOA glue to enable all disparate applications and software to interoperate seamlessly in a single IT system.

"Enterprise IT is no longer a world of BEA or IBM, BEA or Microsoft, BEA or even Oracle," Chuang said. "Now, more so than ever, what you need and what you want—and what BEA alone delivers—is BEA and IBM, BEA and Microsoft, BEA and Oracle, BEA and everything else—all those legacy applications sitting out there. Our job is to make enterprise computing fluid and simple."

A few years ago, the idea of BEA's CEO standing on stage in front of the company's constituency and promoting the use of chief rival IBM's software alongside BEA's would've been unthinkable. In today's market, though, the company has no choice, said Ron Schmelzer, senior analyst for research firm Zapthink. "A big dose of reality set in," he said of BEA's change of tune.

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The IDG News Service is a Network World affiliate.