BEA Systems buys Java start-up for $100 million

Business software maker BEA Systems today spent $100 million to acquire a Java start-up called Theory Center, which makes software for creating e-commerce Web sites.

Theory Center, based in Boston, makes pre-written Java software code that helps software developers build Web sites that connect their customers, employees, suppliers, and partners together.

Today's move helps BEA better compete against rivals IBM, Microsoft, Oracle, Sun Microsystems, and dozens of others in the burgeoning application server market, which is expected to grow to $2 billion in revenue by year 2002, according to analyst firm Forrester Research.

Application servers have emerged as the primary tool for creating e-commerce Web sites. They sit between Web browsers and backend services--such as databases and stock-trading systems--and run the transactions.

Analyst Anne Thomas Manes, of Patricia Seybold Group, said she believes BEA is the first application server maker to buy a software firm that builds pre-built software code, called components, for e-commerce. About 20 independent companies sell pre-built software code, including Tradex and Trilogy, she said.

"This helps BEA because they can just walk into a customer's site and say, 'We've got the framework for building e-commerce applications and you can do it in a short amount of time,'" Manes said.

IBM also offers components, but the technology is aimed at building financial and human resources applications. Oracle recently released pre-built components that handle connections to databases.

Manes said Theory Center's components--based on the Enterprise JavaBeans programming model--give businesses everything they need to create an e-commerce site within a month or two. It features customizable components for order entry, financial transactions, and links to partners and customers, she said.

BEA chief executive Bill Coleman said today's acquisition complements its application server. Last year, BEA purchased application server maker WebLogic for about $192 million.

"We think this gives us first mover advantage in having the components necessary to assemble applications for e-commerce," Coleman said. "We have the most complete, open set of tools that can be used out-of-the-box to configure an e-commerce site."