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BEA under attack from IBM

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Reports from Reuters indicate that BEA is going to come under intensified pressure from IBM as Big Blue has set about bundling WebSphere with its servers and has also developed a partnership with a European software house that, previously, worked with BEA.

The major attack on BEA's share of the market will come from IBM's plans to bundle WebSphere in to the new i-series servers that are targeted at SMEs. This should start within a month and has the potential to dig a significant hole in BEA’s market – assuming that the i-server is going to be as popular as everybody thinks.

The other move is a partnership between IBM and Valtech, a Paris-based technology consulting business. Valtech has been helping businesses to understand and implement BEA’s WebLogic and, so, is well positioned to do the same with WebSphere. In addition to enhancing the IBM business by making sure that WebSphere is properly implemented, Valtech is expected to affect BEA's business by recommending WebSphere over WebLogic.

According to Giga, BEA is still the market leader in J2EE Application Servers with 36 percent of the sales revenues. However, IBM has been closing the gap rapidly and the latest moves are expected to raise its share to within 2 percent of its rival. Most of these gains have been achieved at the expense of the very small players. On the other hand, a recent META survey of actual usage of J2EE application servers puts a 15 point gap between BEA and IBM.

This is an interesting approach by IBM – it has the smell of Microsoft about it. Not only is it bundling its software into its servers in an attempt to at least guarantee success on its own platforms, but it seems that it is also looking to cut off other channels that BEA has previously used. The latter route is particularly interesting because there is no way that IBM, with its massive Global Services arm can claim that it needed more services strength. It is a clear attempt to cut off one of BEA’s routes to market.

It would be reasonable to expect that IBM might well succeed in taking a sizeable chunk out of BEA's market share if it carries on working this way. The question is whether BEA has the firepower to do anything about it.

In recent times, the company has been noticeable by its absence in the PR world. A quick scan down its recent press releases show that it likes to announce awards but little product information. Is it possible that BEA has sat back on its laurels? If that is the case, it's going to get a shock sometime soon because IBM and Oracle will be quite happy to steal its market away from under its nose. ®

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