Application server battle heats up at show

Kicking off its annual developer conference in San Diego this week, BEA Systems will lift the lid on new products and technologies that are designed to help companies link business applications over the Internet, and at the same time shore up its lead in the competitive market for application server software.

Developers attending the show will get an overview of WebLogic Server 7.0, the next major release of BEA's application server, due in the second quarter of this year. They will also receive a test version of a new developer framework, code-named Cajun, intended to make it easier to create J2EE (Java 2 Enterprise Edition) applications, even for programmers familiar with other languages, such as Visual Basic or Cobol.

Attendees will also get to preview new and upcoming products from some of the 150 BEA partners expected to attend. Alfred Chuang, BEA's founder, president and chief executive officer, will outline BEA's product strategy in a speech Monday morning. Other scheduled speakers include James Gosling, the vice president and "fellow" at Sun Microsystems Inc. credited with inventing Java.

The conference comes at an important time for BEA. The San Jose, California, company established an early lead among application server vendors but faces mounting pressure from larger rivals including IBM Corp., Sun and Oracle Corp., all of which likewise sell Java-based application servers. Those vendors have identified application servers as big potential money-makers, as well as a strategic product that can lead to sales of related services and products, said Shawn Willett, an analyst with Current Analysis Inc., in Sterling, Virginia.

"Times are changing for BEA," he said. Application servers have become commodities to a large extent, with each vendor offering similar features, and BEA is under pressure to maintain its edge by more tightly integrating its WebLogic products and offering new tools to lure developers.

The company hopes to do just that next week. It will discuss plans to unify the various elements of its WebLogic platform, including its application server, portal software and Cajun development framework, according to information on its Web site. As one example, it plans to demonstrate how developers will be able to create reusable Web services with Cajun that can be called up through a portal site. BEA has also said it will roll out new resources for developers. Officials declined to offer more specifics ahead of the show.

BEA maintained its lead in 2001 with 36 percent of the revenue in the application server market, according to the most recent estimate from Giga Information Group Inc., compiled in September. IBM last year worked hard to bridge the gap in functionality between WebLogic and its own WebSphere products. It narrowed BEA's market share lead from 2000 but remained slightly behind with 34 percent, Giga estimated. Sun and Oracle trailed, each with less than 10 percent.

"Clearly BEA is still the technology leader ... but the gap has been narrowing and there are some cases where IBM may have moved ahead," said Mike Gilpin, a research fellow at Giga. "Some data suggests that the (performance) benchmarks are not dissimilar either -- WebSphere is a lot faster than it used to be."

IBM and Oracle can offer customers a wider selection of complementary products for integrating applications, building portals, and deploying applications wirelessly, he noted. "BEA has offerings in several of these areas, but not quite as broadly as IBM or Oracle, and in other ways Microsoft (Corp.), so that's one reason why the whole Cajun issue is so critical for them."

IBM, Sun and Oracle are also in a position to offer greater price discounts to customers, who may also be buying servers, databases or other products. Indeed, Sun has hinted that it plans to bundle its iPlanet application server for free with its Solaris operating system. BEA customers "continue to have high levels of satisfaction about just about everything except price," Gilpin said. "It's mostly a discounting issue."

Besides the struggle for leadership among BEA, IBM, Sun and other vendors of Java-based application servers, the Java community as a whole is fending off a push by Microsoft, which is trying to lure developers away from Java and towards its competing .Net initiative. Earlier this month it launched Visual Studio .Net, a new version of its developer tools for building applications that can be tied together over the Web. Although Microsoft still has to convince customers that its software is secure and reliable enough for large-scale corporate applications, its new tools appear "very attractive, easy to use and powerful," Gilpin said. "It's necessary for the key J2EE players to respond; Cajun will be BEA's response to that."

Java supporters such as BEA need to make it easier to take a J2EE-based Web service and move it between application servers from different vendors, Gilpin said. Giga estimates that about a third of companies that use either WebLogic or WebSphere actually use both products. "There's quite a bit of multi-application server usage out there," he said.

BEA has a good shot at retaining its lead, according to both Gilpin and Willett, in part because of its established large base of customers and the broad support it commands from independent software vendors who have tuned applications to work with its product. "They need to position themselves as an independent company, and not part of some bigger proprietary system" Willett said.

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