BEA shaken by further departures

25 August 2004 The exodus of senior executives at application server maker BEA continued this week, with chief marketing officer Tod Nielson joining the ranks of high-level departures.

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Neilson’s departure was revealed in regulatory filings. He is set to leave by the end of the week.

Nielsen’s resignation is the sixth confirmed executive departure in the past two months from BEA – chief architect Adam Bosworth left in late July to join Google, and former chief technology officer Scott Dietzen resigned in early August.

Neilsen joined BEA as part of its acquisition of Crossgain in 2001, where he was then CEO. Prior to that, Neilsen spent 12 years at computer giant Microsoft, where he helped build Microsoft’s network of .NET developers.

The news of Neilson’s departure, coming on top of other high-ranking resignations, will re-ignite concerns over BEA’s future.

Alfred Chuang, the chairman and chief executive of BEA Systems, has repeatedly said he is mystified by all the doubts about his company’s long-term viability, especially as the company now has sales of more than $1 billion.

But the questions are being asked more insistently than ever. Especially in light of the fact that so many key managers have given notice in the past few months.

Furthermore, since May, BEA has failed to meet its forecast financial targets. Its second quarter results, ending in July, disappointed again. Revenues rose 7% to $262.3 million, with growth in services to existing customers offsetting a decline in new software sales, while net income stood at $30.6 million, up 18%. But what spooked Wall Street is that sales of new software licences fell 9% to $116.3 million.

The net result: BEA is worth $4.27 billion less than a year ago, and analysts are wondering about its future, and in particular the impact of intense competition from IBM and others.

The threat to BEA does not just come from bigger rivals such as Oracle, IBM and SAP, but also from open-source application server products such as JBoss.

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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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