Application server eludes definition

Analysts agree: Application servers already make up a half-billion dollar market and will drive sales of roughly $2 billion in the coming four to five years.

And technology buyers concur: Application servers are needed to help them tame the hair ball of connections needed for the typical Web app and to get new systems up-and-running in a hurry. Sixty-two percent of execs surveyed by Forrester Research say application servers will be a strategic part of their development environments by year's end.

With all of this head nodding, you'd think that it would be easy to find consensus on what an application server is. No chance--ask the two dozen or so application server vendors and you'll get a wide range of answers.

Almost every software development toolmaker and database company is entering the application server market, considered by many analysts to be the hottest growth area in the software business since the advent of the relational database.

Like any booming product category, confusion is reigning. A glance at the software landscape reveals that there are now more than 25 companies brandishing the application server label and the number is climbing rapidly.

Analysts--who are scrambling to assess the exploding market--say no one vendor offers a complete application server, yet.

"There seems to be a terminology confusion," said Martin Marshall, an analyst with Zona Research. "It really depends on where these companies are coming from. Are they development tool vendors? Transaction server makers?"

The definition that most players do agree on is that an application server is software that runs on a middle tier, between Web browser-based thin clients and back-end databases and business applications. Application servers handle all of the application logic and connectivity that old-style client-server applications contained.

In essence, the so-called "application logic", which determines how a particular business system should behave, has simply been moved from old-style "fat-clients" to the hipper, trendier middle-tier application server.

"It's a software server that supports thin clients with an integrated suite of distributed computing capabilities," said Ted Schadler, an analyst with Forrester Research.

And some common features, identified by both analysts and technology buyers, are emerging.

For instance, application servers need to support the creation of server components conforming to both COM (Component Object Model) and CORBA (Common Object Request Broker Architecture) frameworks.

Also required are clustering support, load balancing, and failover features. Connectivity to "legacy" systems like mainframes and older transaction and database systems is a must, as is support for some sort of business and application logic.

And that's where the division starts.

On the low end of the price scale, application development tool makers, like Allaire, Inprise, NetDynamics (recently purchased by Sun Microsystems) , BlueStone, and Apptivity see application servers as an extension of their existing toolsets.

These companies "tend to have slide shows that are almost identical," Marshall said. "They tend to be more dispersed and are the little guys scrambling in the foam of this market."

The toolmakers offer combined tool-and-application server packages that offer an integrated development environment and runtime server that lets big companies assemble and deploy Web systems fairly quickly, typically for less than $100,000, Marshall said.

At the opposite end of the price and complexity scales are the transaction processing monitor makers--from BEA Systems and IBM--that have latched onto the application server trend.

Transaction processing (TP) monitors have typically been used as traffic cops on corporate application networks, intended to absorb a crush of client queries and systematically handle the associated database requests, all without losing a single digit.

These high-end systems are the luxury class of application servers, typically used by airlines and credit card processing companies. Many, like IBM's CICS, have been around since the dinosaur age of the computer business.

The application server wave gives TP monitor makers a new way to market their products to Web developers. "These are the people with higher capitalization," Marshall said. "The ground is still cooling in this area, and it isn't clear who the winner will be. There's a great deal of overlap."

And right now the TP monitor makers are targeted at the high-end of the market, leaving them out of the running for lower-priced sales. "Anyone who writes a check for $2 million can get a great e-commerce site. The problem is getting that same thing for $50,000 to $100,000," Marshall said.

In the middle are the database and Web server software makers--Oracle, Sybase, Microsoft, Lotus, and Netscape Communications.

These companies are already well on their way to putting application servers in a starring role in their product lineups. Application servers and databases go hand-in-hand, and these vendors are emphasizing the back-end connectivity of their products, along with the application development potential.

Oracle for instance, which will tomorrow announce version 4.0 of its Oracle Application Server, is focusing on application servers as a way to host new Web systems, such as bill presentment and other e-commerce-related technologies.

Most large companies already use software from the database and Web server crowd, so moving into the application server space should be an easy transition for them.

In fact, in a recent survey of 50 Fortune 1000 companies conducted by Forrester, 46 percent said they were already using Microsoft's Transaction Server in an application server-based system.

Many analysts predict which database and Web server vendors will outlast competitors and dominate the application server market in the coming five years.

Microsoft, Netscape, Oracle, IBM, and Sun are Schadler's picks to lead the market in the future. These will be the vendors to deliver the first complete systems to market, Schadler said.

And, just as it has done in the database market, Microsoft is expected to drive down application server prices in the coming years.

Forrester advises buyers to have a long-term strategy in place, but to be open to experimenting with products from the smaller or less known vendors.

Since the application server market, and the definition of the technology itself, are still in flux, Schadler said buyers should take a look at the market and find the products that best fit their applications. "Users should not be afraid to make short term bets," he said.

Despite the confusion from the vendor side of the application server market, technology buyers tend to agree on what they're shopping for, Schadler said.

"People will want the same thing at the end of the day. They want to get to resources and serve customers," he said.