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BEA gains ally in battle with IBM

The software maker gets a boost in its ongoing application server fight with IBM through a bundling deal with Hewlett-Packard.

Software maker BEA Systems on Wednesday got a boost in its ongoing application server battle with IBM through a bundling deal with Hewlett-Packard.

HP said it will install BEA's WebLogic Java application server software on all of its hardware servers. Application server software is used to build and run custom business applications, such as corporate Web sites or order management systems.

Through the deal, BEA will gain the distribution channel of HP's hardware systems, which could help the software maker ward off competition from IBM. Big Blue took the lead in the Java application server market away from BEA in 2002, according to research firm Gartner Dataquest.

Analysts say IBM has an advantage over its rivals because it can bundle its own WebSphere Java software with its hardware servers at a discount. By becoming the default Java application server on HP hardware, BEA greatly expands its distribution on servers ranging from low-cost Linux machines to high-end HP NonStop systems.

The latest bundling arrangement extends an existing partnership between HP and BEA, through which HP sells WebLogic with its Unix servers. Under the deal announced Wednesday, HP will also deliver WebLogic with its ProLiant Linux servers and its AlphaServers servers that run the OpenVMS operating system. In June, HP will bundle WebLogic with its HP NonStop servers as well.

HP and BEA will provide post-sales support for WebLogic on all HP's server hardware, as well.

The latest HP-BEA deal is intended to give customers a choice in server hardware, said Michael Wardley, the HP-UX marketing manager. By providing the same level of service and support for WebLogic across its entire product line, HP customers can choose the most appropriate hardware to work with BEA's software, he said.

BEA also has a WebLogic bundling partnership with Sun Microsystems, which ships its Solaris Unix servers with WebLogic. That partnership is conflicted, however, because of Sun's introduction of its own SunOne Java software that competes directly with BEA's WebLogic.

In the late 1990s, BEA made a large portion of its revenue selling WebLogic on Sun's Solaris Unix servers. But once Sun began selling SunOne in earnest about two years ago, the BEA partnership with Sun became less strategic, said John Rymer, an analyst at Forrester Research.

As a result, Rymer said, the existing HP-BEA partnership is bearing more fruit for both companies.

BEA benefits from HP's hardware sales channel. Meanwhile, HP exited the Java application server business in 2000, removing competitive conflict with BEA over Java products. And by bundling BEA's WebLogic, HP can match competitors IBM and Sun, Rymer said.