BEA rejects acquisition prediction

A prediction that BEA Systems will be acquired by a larger vendor is among the pronouncements in an October analyst report on the Web services market that calls IBM and Microsoft industry leaders and labels Sun Microsystems as falling behind.

The Forrester Research report, entitled "Web Services Platform Shootout," says that Web services infrastructure will transform existing software runtimes into a more flexible services-oriented architecture.

The report, which the author, analyst Ted Schadler, said was done independently without being commissioned by any vendor, featured findings based on surveys with numerous users and systems integrators and 30 vendors.

Leading the pack with the best strategy and strongest platforms are IBM and Microsoft, while Sun lags. The report predicts Java application server vendor BEA's eventual absorption by a larger vendor, namely Sun, Hewlett-Packard, or perhaps SAP, but BEA officials quickly rejected the contention.

"With relentless focus and a little-engine-that-could attitude, BEA has often outwitted and outsold IBM, Sun and Oracle," the report stated. "However, gigantic Microsoft and IBM will eventually wear BEA down. A systems vendor like HP or Sun will likely snap it up. But don't leave SAP out of the bidding," according to the report.

Schadler, in an interview, admitted the report is "very speculative and [BEA is] not very happy about it if you could imagine."

BEA's lack of developer resources relative to larger companies combined with its solid product lines and customer base make it an attractive acquisition target, Schadler said.

"BEA's a great company. They have a great product, they've got devoted customers," said Schadler. "They're just not a big company. They're a billion-dollar company, not a $30 billion or $40 billion or $80 billion company. That makes them attractive for lots of reasons."

But a BEA official rejected the report's prediction.

"We think [Forrester] is a fish out of water" in speculating on such business matters, said Tod Neilson, chief marketing officer at San Jose, Calif.-based BEA. Forrester, he said, previously has predicted BEA's acquisition erroneously. Additionally, the company is not shopping itself around, said Neilson.

"I think [Schadler's] one takeaway was we're smaller than IBM or Microsoft," Neilson said. But history has shown smaller companies to be more responsive and innovative, he said.

Neilson cited a Morgan Stanley report from 10 days ago that said BEA had room to compete with IBM and Oracle and that the company is a major survivor of the economic downturn.

Representatives at Sun and HP said they would not comment on industry speculation about any acquisition plans. HP recently agreed to bundle a trial version of BEA's application server with HP servers.

A Sun official rejected the report's notion that IBM and Microsoft are leading in the Web services infrastructure battle while Sun trails. "It's an interesting comment because IBM Web services float through WebSphere, and WebSphere is an implementation of Java," which Sun invented, noted David Harrah, marketing manager in the software organization at Sun, in Santa Clara, Calif.

"I think it's valid to say that IBM and Microsoft have done more to hype Web services than Sun has done because Sun is generally in a heads-down, let's-develop-that-technology-before-we-start-yapping-about-it [mode]," Harrah said.

The report says companies need a new layer of Web services infrastructure. Microsoft and IBM products are farthest along, according to Schadler, who cited IBM's WebSphere application server stack and related offerings.

Microsoft, meanwhile, has Windows Advanced Server OS, the .Net Framework, and related offerings such as the BizTalk application integration platform. Sun's Harrah, however, said the Sun ONE stack addresses Web services needs with products such as an application server and directory and identity servers.

Other projections and findings in the findings in the survey include the following:

-- A prediction that the Web services standards process will take two more years. The next level of standards, a security framework and process orchestration, is in committee. But standards still are lacking for transactions, reliable messaging, cross-domain security, and management.

-- BEA and Oracle trail Microsoft and IBM closely in the area of Web services infrastructures.

-- CIOs need to settle on a single "Java giant" rather than having separate infrastructure commitments with BEA, IBM, Oracle, and Sun. CIOs also need to work with Microsoft .Net servers.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about BEABEA SystemsForrester ResearchHewlett-Packard AustraliaIBM AustraliaMicrosoftMorgan StanleyOracleSAP AustraliaSun Microsystems

Show Comments