Sun renews BEA app server tension

BEA Systems has voiced its continued support for Sun Microsystems's Solaris 9 operating system, despite Sun's decision to integrate its application server in the OS.

Although Sun's move potentially gives enterprise users the ability to forego purchasing BEA's application server, a BEA official attending Sun's official Solaris 9 launch event in Menlo Park, California, on Wednesday was optimistic about BEA's future.

"We think that people will still come to us for the same reasons that they have to date," said Eric Stahl, director of product marketing at San Jose, California-based BEA. He argued that BEA's WebLogic application server offers a more productive developer environment. "We continue to optimize on Solaris."

Stahl said BEA is not upset about Sun's move. "I think in the end, it's as strong a relationship as we can possibly have," said Stahl. Sun's decision to include a J2EE (Java 2 Enterprise Edition) application server ensures optimization of BEA's WebLogic application server on Solaris, he added.

Solaris 9 features the J2EE 1.3-compliant Sun ONE (Open Net Environment) Application Server 7, Platform Edition, with a single server development and deployment license for use on Sun systems, according to Sun. The product formerly bore the iPlanet nameplate.

Sun officials stressed Sun's inclusion of the application server would boost deployment of Web services and expand opportunities for partners.

"This actually expands the market opportunity for our partners, such as BEA, for example," claimed Anil Gadre, vice president of Solaris at Sun.

An initial report of plans to embed the then-iPlanet application server into Solaris, appearing on InfoWorld.com in March 2001, sparked a sell-off of BEA stock and Sun's subsequent denial.

Sun's Gadre at the time said Sun had no plans to integrate iPlanet with Solaris.

BEA is currently the market share leader in application servers, owning 34 percent of the market, according to a Dataquest report detailed on Wednesday.

According to the report, IBM captured nine percent market share over the course of 2001, growing to 31 percent, while BEA captured one percent, rising to a market-leading 34 percent share. The report said Sun, which remained in third place, lost one percent share, falling to nine percent.

But the report goes on to say that the worldwide application server market suffered a severe growth slowdown last year as companies curtailed IT spending. New license revenue grew 20 percent, down from 92 percent in 2000. New license revenue amounted to US$1.18 billion in 2001, up from $990 million the year before.

IBM outpaced the market with 71 percent new license revenue growth, giving the Armonk, New York, IT giant a 31 percent share of the market, up from 22 percent in 2000.

"The net result of the IT spending slowdown and the more cautious tone for emerging new software companies made IBM a safe bet and helped it pull more application server revenue," Joanne Correia, vice president of Dataquest's Software Industry Research Group, wrote in the report.

The trend of packaging application servers with other technologies will "increase dramatically" in 2002, Correia wrote. In fact, vendors including Oracle and Fujitsu never sold an unbundled application server. IBM and BEA will also bundle application servers with, for example, portal products and development tools, Dataquest said, adding that unbundled application server products will continue to exist.

Dataquest predicts that the application server market will grow at a 22 percent compound annual growth rate to just less than $3.2 billion by 2006.

Framingham, Massachusetts-based IDC also released its application server software platform market forecast on Wednesday, stating that it expects the market to reach almost $4.4 billion by 2006. IDC agrees with Dataquest that the market "failed to show the phenomenal growth in 2001 that it showed in the previous two years," but sees significant opportunities for vendors as the economic situation improves.

IDC also says the gap between market leader BEA and IBM has "narrowed significantly," but gives the two companies a smaller share of the market with 47.8 percent of the market in terms of revenue.

One analyst said Sun's decision to tie the application server to the operating system would boost performance.

"This is a standard operating system reality. Anytime you take functionality and you burn it into the kernel, you get this speed-up [in performance], and that's what they've done," said analyst Jean Bozman, research director for global enterprise server solutions at IDC, in Mountain View, California.

BEA, Bozman said, would need to do heavy marketing to tout the advantages of its products. Existing BEA customers can be expected to remain with the company's platform, she said.

Other analysts see the move as a sound one for Sun.

"I believe the inclusion of the application server into Solaris can help lower the cost of operations as companies develop Web services. However, Sun customers will still be able to work with third-party applications and middleware with Solaris 9, as the company is avoiding proprietary lock-ins," said Shawn Willett, principal analyst at Current Analysis in Sterling, Virginia.

Joris Evers is an Amsterdam correspondent for IDG News Service, an InfoWorld affiliate.

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