BEA not a survivor, says Forrester analyst

7 October 2002 Leading application middleware vendor BEA Systems may not survive the web services revolution intact, a Forrester Research analyst has suggested.

In a new report entitled Web Services Platform Shootout, Ted Schadler argues that, “BEA has often outwitted and outsold IBM, Sun, and Oracle. However, gigantic Microsoft and IBM will eventually wear BEA down. A systems vendor like Hewlett-Packard (HP) or Sun will likely snap it up.”

Since starting up in 1995, BEA has grown rapidly to lead the market for Java development tools and Java 2 Enterprise Edition (J2EE) middleware. In recent years, however, BEA has faced tougher competition from IBM’s WebSphere J2EE application middleware. Now both companies share the top spot with 34% of the $2.19 billion (€2.23bn) application server market, according to market research from Giga Research Group.

Schadler says it will only be a matter of time until IBM and Microsoft outpace BEA with their significantly larger size and resources, especially in the web services market.

Alternatively, other vendors might choose to buy BEA, Schadler claims. Enterprise resource planning systems vendor SAP would benefit, as would HP, Oracle and Sun. The latter account for only 3%, 6% and 7% of the J2EE application server market respectively, yet are still large enough to acquire BEA.

“With BEA in its stable, SAP could accelerate its infrastructure build-out and beat out applications vendors like Siebel and PeopleSoft on completeness,” he suggests.

BEA remains popular with corporate buyers, having grown revenues 19% to $975.9 million (€994.3m) in 2001 from $819.8 million (€835.3m) in 2000. But, the increased product development and technology acquisition costs needed to keep ahead of the opposition meant that the company recorded a net loss of $35.7 million (€36.4m) in 2001, compared to a net profit of $17 million (€17.3 m) the previous year.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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