BEA, IBM Square Off in App Server Market

BEA Systems has announced new e-commerce and personalised Web content-management applications that could help extend the company's growing technical lead in what some analysts predict will be a close race with IBM for the top spot in the application server market.

The release of BEA's WebLogic Commerce Server 3.1 and WebLogic Personalization Server 3.1 comes on the heels of several high-profile user implementations for the San Jose, -based e-commerce transactions company.

Last month, BEA signed a major deal with Redwood City, Calif.-based DHL Worldwide Express. In August, the company inked an agreement with British Telecommunications PLC in London, following a deal in July with Deutsche Bank AG in Frankfurt, one of the world's largest financial services companies. Other BEA customers include Inc., ETrade Group Inc., FedEx Corp., Kaiser Permanente Health Plan Inc. and United Air Lines Inc.

A recent study by Giga Information Group Inc. in Cambridge, Mass., placed BEA and IBM in a dead heat this year for leadership in the $US1.64 billion application server market - both companies with a projected 24 per cent market share.

According to Yesim Natis, a vice president and research director at Gartner Group Inc. in Stamford, Conn., BEA's strengths are a loyal customer base and attractive technology.

Customers Up for Grabs

"BEA still has a bigger installed base than IBM, but IBM is growing," said Natis, who added that BEA had been winning over IBM customers until IBM released an updated version of its WebSphere product last December.

"IBM has a presence, but not a lot of new business," according to Natis. "BEA is more aggressive and will penetrate the new markets better than IBM."

For Ed Tobin, founder of Driveway Corp., a San Francisco-based online file-storage company and BEA site, the decision to go with BEA was a technical one. "We wanted to build on the [Java 2 Enterprise Edition (J2EE)] emerging standard, and it became clear that BEA was a leader in developing these technologies," he said. "Although we started off looking at alternatives, the decision was based [on] features and who was further along on the J2EE standard."

Mike Gilpin, another analyst at Giga and co-author of the firm's application server market forecast study for this year, said that for the past few years, BEA has been a technology leader in the market.

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