BEA targets IBM with app server plan

The company, runner-up to IBM in the market for Java-based software that's used to manage Web transactions, said it plans to officially announce a new version of its WebLogic Platform server software, along with a plan for linking business applications, at a press conference in San Francisco.

The plan includes key pieces of BEA's new strategy to tackle the integration software and development tool markets, as it looks for an edge in a highly competitive area.

Version 8.1 of BEA's WebLogic Platform may appear at first glance to be a minor upgrade. But CEO Alfred Chuang said the release is the culmination of more than two years and several million dollars' worth of software engineering.

WebLogic Platform is a suite of Java-based server applications, based on the Java 2 Enterprise Edition (J2EE) standard, which businesses use to build custom applications. The new release includes corporate portal software, specialized integration software, data access tools, and a set of development tools that BEA hopes will make Java programming much easier.

San Jose, Calif.-based BEA once dominated the market for Java server software but lost its lead to IBM, according to Gartner Dataquest research announced in May. The company is facing renewed attacks on its customer base from IBM, Oracle, Sun Microsystems and open-source alternatives such as JBoss Group.

Now, the company is basing a comeback on better software for connecting business systems from multiple vendors and on an easy-to-use Java development tool.

It still faces competition from deep-pocketed rivals, though, and the task of expanding its base of customers beyond technologically sophisticated, high-level users to more mainstream corporate developers.

"BEA's success hinges in penetrating more deeply into enterprise, and that's all about selling the benefits of Workshop," said Ted Schadler, an analyst at Forrester Research, referring to BEA's WebLogic Workshop Java-based development tool. "The challenge is that developers don't buy software infrastructure, so it's a different buyer than BEA is used to calling on today."

BEA became a powerhouse in the Java marketplace in the late 1990s on soaring sales of its WebLogic application server, which is used to host high-volume Web sites and demanding business applications. Even as its revenue peaked at $976 million in fiscal 2002, the company started to build up a suite of interconnected server components that worked in conjunction with its application server, including a portal and integration software.

At the same time, it began boosting its investment in tools, acquiring CrossGain in July 2001. BEA said WebLogic Workshop, which it plans to deliver with WebLogic Platform 8.1, is a significant improvement over competing Java-based development tools. Instead of a range of tools tuned to individual server software products, it provides a single tool for building applications that can run on the entire BEA suite.

"Back in November 2001, we said that customers don't want to have their software infrastructure pieces in separate silos," said Tod Nielsen, chief marketing officer at BEA. "Ironically, now you hear vendors talking about application platform suites. But two years ago, we were a lone voice in the wilderness."

The bundling strategy is a key component in BEA's effort to find new sources of revenue outside its bread-and-butter Java application server business--which now represents about 60 percent of its revenue--and garner a bigger piece of the integration software business. Competitors--including IBM, Oracle and Sun--also offer bundled "application platform suites."

Taking the pain out of Java
One of BEA's central tactics for fending off rivals is to build up a pool of Java developers for its revamped Workshop. The software maker's goal with the programming tool, originally introduced in 2002, is to simplify J2EE application development--long considered more difficult than programming for Microsoft's Windows operating system.

BEA is encouraging Java programmers to use Workshop in order to drive revenue for WebLogic Platform, which developers' customers will need before they can use the Java applications built for them, Nielsen said. (Nielsen and other key software architects at BEA previously worked in high-level positions in Microsoft's tools division and at CrossGain.)

The strategy of wooing developers in order to lock their customers into your software is a time-honored one in the software industry. Microsoft has had the most success in promoting Windows sales with its development tools. But no single Java software company--not even Sun, the creator of the programming language--has been able to attract the same developer loyalty as Microsoft.

While interest in WebLogic Workshop has grown steadily, BEA still hasn't reached its goal of one million developers for the tool. Currently, about 600,000 developers are registered WebLogic Workshop users.

Ultimately, BEA intends to submit its technology into the Java Community Process or the open-source community to be standardized.

WebLogic Workshop uses visual modeling tools and borrows the notion of "controls" from Microsoft's popular Visual Basic tool, which programmers can use to wire together prewritten pieces of code to assemble a business application. One BEA customer, Pfizer Pharmaceutical, has found that WebLogic Workshop does accelerate its J2EE development.

"Workshop will do for Java what (Microsoft's) Visual Studio did for Windows development, which is simplify the process of development of J2EE applications, which has been a huge problem with the adoption of J2EE," said Martin Brodbeck, director of applications architecture for Pfizer.

Nielsen said BEA's focus on Java developers is essential to the company's efforts to compete, notably against its chief rival, IBM. With its acquisition of Rational Software last December and an expanded developer program, IBM, too, has made developer and independent software partner relations a top priority.

Workshop is designed to allow programmers to more quickly construct Java applications that pull data from existing applications. BEA hopes the product will attract buyers away from the products of integration software specialists such as Tibco, SeeBeyond and WebMethods. It passed on opportunities to purchase one of these software integration specialists and focused instead on building J2EE-based integration software that is tightly bound to its other products, according to Nielsen.

Pfizer is one customer that has bought into BEA's strategy. The pharmaceutical company is using BEA WebLogic Platform 8.1 and Workshop for all development of new J2EE applications. Pfizer chose BEA mainly because the idea of combining new application creation with application integration fit well with its overall strategy.

"One of the strategic directions of the company was to allow different parts of the organization to share information across business groups," Brodbeck said.

Nielsen said BEA hopes next to tackle application security by integrating some technology that it acquired earlier this year into WebLogic Platform. The company is also trying to simplify application deployment, he said. That's an area of the software business that's becoming increasingly competitive.

BEA has gone a long way toward silencing critics, Nielsen said. Critics said earlier this year that the company had lost its relevance or would soon be acquired. But, he acknowledged, the battle for dominance in the billion-dollar infrastructure software market continues to be brutal--and it will get tougher in the future.

Microsoft is expected to focus a growing share of its nearly $50 billion war chest on software integration and management. Its loyal base of Visual Studio.Net users gives the company huge momentum.

But that's a battle for next year. "(Direct competition with Microsoft) will happen at some point," Nielsen said. "The market is waiting for a definitive winner between IBM and BEA."