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BEA partners with Intel on e-biz software

The application-server software maker announces a partnership with Intel in a bid to increase its lead in the market for e-business software.

BEA Systems on Monday announced a partnership with Intel in a bid to increase its lead in the market for e-business software.

The two companies will jointly fine-tune BEA's e-business software to run on servers that use Intel's new Itanium processor. The effort will focus on optimizing BEA software for both Linux and Windows on Itanium, an Intel representative said.

Analysts say the collaboration is important for both companies.

For BEA, having Intel support, market and sell its products gives the company a leg up on its competition in the lucrative market for application-server software, technology that handles e-business and other Web site transactions.

In the $2.2 billion market in 2000, BEA ranked first with 18 percent of the market, followed by IBM with 15 percent and Sun Microsystems with 8 percent, according to a recent study by market researcher IDC.

For Intel, the deal with BEA is a vote of confidence as it tries to crack the profitable high-end server market with its faster Itanium processors. Intel has done well in the less-profitable low-end server market, while rivals Sun, Hewlett-Packard and IBM have dominated the high-end market.

Analysts say Intel's success in the high-end market depends on the number of software makers that write software that runs on its processors.

BEA plans to release software that runs on Intel's Itanium chip this fall. So far, six server makers--Compaq Computer, Dell Computer, HP, NCR, Unisys and Groupe Bull--have said they will support BEA's application server running on Itanium.

"This is the most important deal we've ever done," BEA Chief Executive Bill Coleman said in an interview.

Although the Itanium-based server market is negligible now, "it could be the vast majority of the market in the next couple of years," Coleman added.

Meta Group analyst Nick Gall said BEA's partnership with Intel is a smart move because it gives the company a new avenue for selling its software. BEA has sold a lot of its software running on Sun's servers, but Sun is also a BEA competitor in the application-server market.

"Their good partnership is going to shift if Sun is serious about competing in the application-server market," Gall said. "Therefore, (BEA) has to look at other additional partners."