Welcome!

IBM Cloud Authors: Yeshim Deniz, Liz McMillan, Elizabeth White, Pat Romanski, Stefan Bernbo

Related Topics: IBM Cloud, Java IoT, Industrial IoT, Containers Expo Blog

IBM Cloud: Article

How Long Can BEA Survive, Industry Asks

How Long Can BEA Survive, Industry Asks

Related Links

  • How Low Does BEA Have to Go?
  • How Long Can BEA Survive, Industry Asks
  • Why WebSphere?
  • A Successful Ingredient Offers Choice
  • A Leader with New Customers

    The May issue of Java Developer's Journal (Vol. 9, issue 5), scooped the annual Gartner/Dataquest Report six weeks before it was published and asked the question, "How Long Can BEA Survive Against IBM?" The day after the report came out, BEA announced its quarterly earnings and its stock had dropped 23%.

    As predicted in the May issue of JDJ, the Gartner/Dataquest report showed that the proprietary application server market is dominated more than ever before by IBM, with BEA's share slipping for the second successive year.

    IBM's share in 2003, according to the annual study, hit 41.3% ($429.7 million) "up from 36.4% in 2002," while BEA's slumped to 27.5% ($286.2 million), down from 29% in 2002.

    The figures are a vindication of Armonk, NY-based IBM's approach to the Java app server market, especially bearing in mind that the total market fell in 2003 by 8.8% compared to 2002

     

    It was in 2002 that BEA first slipped from the top spot, dropping from 2001's 34% to 29%. In a race that began in 2000, it took Big Blue just two years to catch up. Oracle came in third to BEA in 2003, Gartner's study reveals, with a 19% market share.

    Joanne Correia, vice president of the Gartner/Dataquest Software Team and the analyst who has produced this particular study each year, confirmed, "IBM is gaining share in every market, whereas most vendors were flat or negative."

    Just two days after its stock dropped 23% - its biggest drop in more than five years - BEA came out fighting on May 19th, with the news (revealed by WebSphere Journal's sister publication WLDJ before the official announcement) that it was donating - to what CTO Scott Dietzen referred to as "Open Source Land" - the first open source application framework targeted at Java-based Web applications: "Project Beehive."

    "Project Beehive" is the name BEA has given to its release of the runtime application development framework from its BEA WebLogic Workshop tool and includes the controls in Workshop.

    Announcing the release to the world, Dietzen emphasized that this was no sudden shift in BEA strategy just to resist stock market pressures. "We had planned long-term to announce Beehive before eWorld," he said. "This is a foundational piece [of BEA's future strategy] and is the motivation for this announcement now, so that the Java community has a chance to assimilate and see how it fits into everything before our user conference next week in San Francisco."

    The response to the news was also strong, as opinions changed from firing the CEO Alfred Chuang to suggestions that HP, Microsoft, or Oracle may bid to buy the company.

    Rumors and suggestions appeared on the message boards that JDJ's publisher had warned Chuang back in his March editorial, Success, Arrogance, Rise and Fall," that the direction in which he was taking his company did not look good.

    Following is just some of the discussion on the BEA news, which includes the Gartner/Dataquest report, BEA's latest quarterly earning results, and Beehive.






    Story comments from the message boards

    WEBLOGIC TRANSITION WILL CONTINUE IN Q2
    Ouch...conf call mentioned that the WebLogic transition will continue in Q2 Translation: license revenue could be lower again.
    - Laid Off Last Summer

    DOUBLE SPEAK BY ALFRED
    Double speak, poor sales execution - excuses, excuses - Alfred blamed merger and acquisition for poor results. Meanwhile, Oracle and IBM are gaining license revenue - what the hell?
    - redhotchillpepperlover

    BEA SUPPORTERS ARE MISSING THE BIG PICTURE
    BEA supporters are missing the big picture. BEA got here basically selling app server to techies, first to market with the best product in a boom economy.

    To get to the next step, they need to sell their platform product against the big boys with more mature products and much bigger install bases to farm.

    The biggest hurdle is that they will use price as their sword. They can discount and give their software away because alternate lucrative sources of revenue exist for them. BEA cannot and that will be their Achilles heel. BEA does not have alternate revenue streams to compete to what amounts to "free." If they try the net, net is zero or negative license revenue growth.

    This is why this stock is getting bashed, not for their results today, but for expected results during the next quarter and beyond.
    - mpraps

    BEA SHOULD JOIN ECLIPSE
    We do not understand why BEA is not joining the Eclipse Board? Eclipse is becoming the leading IDE. WebSphere Application Server is getting more and more market shares because of its integration inside WSAD and Eclipse. BEA and WebSphere are both great application servers!!!
    - Vlad VARNICA

    EXPECT ALFRED TO GET FIRED IN THE NEXT 6 MONTHS OR SO
    Folks, if you can't beat a dinosaur like IBM in the app server space, you have to ask yourself, how low have you sunk? Since when did IBM ever have a lead in any software space (apart from mainframe)?

    Alfred the magician's answer was to hire the crappy dinosaur execs from the laggards (IBM, HP) and bring them to BEA so that BEA could finally end up like a small IBM - formal, but really useless.

    Expect Alfred to get fired in the next 6 months or so and for BEA to have a sliver of a final chance of recovering.

    Expect to see this stock hover around the 6-7 range in the next few weeks. Could even go back to test support at 5, if the markets tank. Get out now longs. Shorts will make a killing on this in the next few weeks. IMO.
    - stockmeister88

    WHAT ABOUT JBOSS?
    Aside from BEA and IBM, the report attempts to imply 31% in the "others" category. Independent industry analysis shows that JBOSS owns 24% to 27% of that. How is that not important and why was it not mentioned? Is the goal of the article to inform or to concoct some artificial metric called "commercial" and report on "commercial" application servers? What they mean by "commercial" is not that the products are used for industrial commercial purposes but rather that you paid a large sum for the product. Highly misleading and a real disservice to readers, in my opinion.
    - Robert Kashmir

    ALFRED'S MOTIVATIONAL SPEECH
    I will never forget his motivational speech to the sales force a few years ago. He said something like, "All of you must kick some ass and have fun." He must have been referring to management kicking the sales force's ass...and working there was definitely no fun! They turn over the sales force every year. Not a good use of money in my opinion.
    - foo_fighter007

    I'M NOT SURE WHO OR WHAT IS BRINGING BEA DOWN
    I am not sure who or what is bringing BEA down, but it seems unlikely to be journalism: 4 out of the 5 research firms listed here by Yahoo Finance recommended a downgrade on May 14 after their quarterly earnings report.

    The graph for the last 3 months tells its own story.
    - barthrh213

    THEY WILL NEVER SEE IBM IN THEIR REAR VIEW MIRROR AGAIN
    Can BEA survive against IBM? Give me a break - they will never see IBM in their rear view mirror again. BUT, now they see Oracle in their rear view (despite their lame assertions that they don't). The real question is "can they survive against Oracle" - which is undoubtedly the database underneath the large majority of their installs. Microsoft is still operating on a largely obstacle-free non-Java parallel path, so no stopping them. But Oracle...that spells big trouble for the BEA gang. The fight with Big Blue is over, and if they aren't careful, the fight with Big Red could be their undoing.
    - John

    ROFLMAO!!!!
    The fact is that Alfred has been a better CEO than 99% of all CEO's in existence.

    ROFLMAO!!!!

    In fact, let's see how many of you can name another company that went from 0 to a billion dollars in such a short period of time....

    The fact is that Bill Coleman was in charge when BEA was formed, and Bill Coleman was still in charge when BEA became a billion dollar company!

    Alfred took over, decided to put ALL BEA's eggs in the Java/J2EE basket, and that strategy has failed!!!

    WebLogic Platform 8 (Alfred's baby) is basically dead on arrival - its sales have actually DECLINED the last three quarters. That is a failure my friend, nothing else.

    I've worked under both Coleman and Alfred - Alfred doesn't come close to Coleman. He's an engineer and has NO business running a company. He should be replaced, and I predict he will be replaced shortly!!
    Oh, and by the way....
    TOLD YA!!!!
    -kikuyo4me

    BEA WILL NOT BE ABLE TO SURVIVE AT ALL IN THE LONG TERM
    I am of the opinion that BEA will not be able to survive at all in the long term. My prime reason for this opinion is that I believe money cannot be made by just selling middleware. In most large accounts, IBM/Oracle/Sun are giving away middleware (app/web/portal/dir servers) to get more hardware and service revenue. It will be hard for BEA to compete with, for example, Sun's $100/employee middleware pricing model.
    -AM

    THE PART OF THE TAG LINE IS VERY REVEALING
    Not good at all IMHO!

    The part of the tag line that is very revealing is this: "Protection from Vendor Lock-in."

    That is a very real problem for BEA sales right now. WebLogic 8.1 platform, as it stands now, is a very strong "lock-in" for BEA. There's all this "stuff" in the form of callable APIs, but if you develop to those APIs, you have to pay very big bucks to BEA and ONLY BEA to deploy whatever system you develop. You are "locked-in" to BEA for deployment licenses and maintenance fees.

    I guarantee you that the tag line was created in direct response to field sales feedback about why they aren't able to move the 8.1 platform in the quantities BEA had hoped.

    But how will Beehive help BEA?

    It smacks of a desperation move, a quick fix to stem the tide of the open source movement. It will also have a chilling effect on current 8.1 Platform deals, as customers hold off to see if they can get a cheaper or free open source implementation of what is currently available in Platform 8.1.

    Sorry longs, I don't think this bodes well for the long term, watch for pops and exit as painlessly as you can!

    IMHO of course!
    -kikuyo4me

    Related Links

  • How Low Does BEA Have to Go?
  • How Long Can BEA Survive, Industry Asks
  • Why WebSphere?
  • A Successful Ingredient Offers Choice
  • A Leader with New Customers
  • More Stories By WebSphere News Desk

    WebSphere Journal News Desk trawls the world of e-commerce technologies for news and innovations and presents IT professionals with updates on technology trends, products, and services in the WebSphere family.

    Comments (3) View Comments

    Share your thoughts on this story.

    Add your comment
    You must be signed in to add a comment. Sign-in | Register

    In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


    Most Recent Comments
    Kirk Patrick 08/17/04 10:03:12 PM EDT

    Reads like a tabloid and insults intelligence of readers.

    Roger Lee 08/05/04 02:33:20 AM EDT

    Having worked with bea Weblogic (5.x-8.1)for the past four years and more recently Websphere 5.x I find these figures about market share totally unbelievable. IBM give the product away. Weblogic is a far superior product and the ease of development is far greater. WS is fine if you use WSAD and DB2!

    pawan 08/05/04 12:52:53 AM EDT

    What BEA needs to do now is to reduce costs and develop some platform from where they can compliment their J2EE business. The reason they cant compete with other big reds and blues is because all other can compliment their existing resources with something added e.g. the big red and blue have their databases. To sell to enterprises, you cant ask them to buy a middleware, becuase many dont understand the term of middle-ware. They will still go for some org that can offer them middleware and back-end(with some jazzy old-package-new-words things for free). Right, to state crudely, BEA needs a database of its own, and needs it real fast, if it wishes to compete in the market. Even though it seems really fool-hardy to think about it and even unrealistic, but BEA will have to sit tight and just cross their fingers that before they offer a complete solution, like the reds and blues, and that too before the market forgets them.

    IoT & Smart Cities Stories
    All in Mobile is a place where we continually maximize their impact by fostering understanding, empathy, insights, creativity and joy. They believe that a truly useful and desirable mobile app doesn't need the brightest idea or the most advanced technology. A great product begins with understanding people. It's easy to think that customers will love your app, but can you justify it? They make sure your final app is something that users truly want and need. The only way to do this is by ...
    Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
    Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
    DXWorldEXPO LLC announced today that Big Data Federation to Exhibit at the 22nd International CloudEXPO, colocated with DevOpsSUMMIT and DXWorldEXPO, November 12-13, 2018 in New York City. Big Data Federation, Inc. develops and applies artificial intelligence to predict financial and economic events that matter. The company uncovers patterns and precise drivers of performance and outcomes with the aid of machine-learning algorithms, big data, and fundamental analysis. Their products are deployed...
    The challenges of aggregating data from consumer-oriented devices, such as wearable technologies and smart thermostats, are fairly well-understood. However, there are a new set of challenges for IoT devices that generate megabytes or gigabytes of data per second. Certainly, the infrastructure will have to change, as those volumes of data will likely overwhelm the available bandwidth for aggregating the data into a central repository. Ochandarena discusses a whole new way to think about your next...
    CloudEXPO | DevOpsSUMMIT | DXWorldEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
    Cell networks have the advantage of long-range communications, reaching an estimated 90% of the world. But cell networks such as 2G, 3G and LTE consume lots of power and were designed for connecting people. They are not optimized for low- or battery-powered devices or for IoT applications with infrequently transmitted data. Cell IoT modules that support narrow-band IoT and 4G cell networks will enable cell connectivity, device management, and app enablement for low-power wide-area network IoT. B...
    The hierarchical architecture that distributes "compute" within the network specially at the edge can enable new services by harnessing emerging technologies. But Edge-Compute comes at increased cost that needs to be managed and potentially augmented by creative architecture solutions as there will always a catching-up with the capacity demands. Processing power in smartphones has enhanced YoY and there is increasingly spare compute capacity that can be potentially pooled. Uber has successfully ...
    SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
    When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...