HP's old Bluestone team found off New Jersey Turnpike

Oracle makes XML tools grab

The case of the missing HP Bluestone developers has been solved with close to 20 of them turning up at an Oracle XML sweatshop located in New Jersey.

When HP's ill-fated Bluestone adventure ended last year, a number of investigators in the industry went in search of the application server IP and developers. Oracle and HP had engaged in talks over the Bluestone assets, but a deal was never completed. Time passed, and the Bluestone crew was forgotten.

Oracle has since picked up some of the ex-Bluestone team, paying particular attention to the group's XML tool experts.

"When they were available, we took advantage of that," said John Magee, vice president of Oracle9i Application Server marketing. "We set up an office in New Jersey for about twenty of them."

Why the interest in the XML group? We turn to Redmonk's principal analyst James Governor for the answer.

"Oracle would be interested in bulking up its XML handling capabilities and tools," Governor said. "This is a critical area in the middleware war against BEA, IBM and Microsoft. So far none of these vendors "owns" the XML tool market, so it is very likely Oracle is investing in this area as a potential differentiator. Oracle9i Developer Suite is already a powerful environment for Java and model-based development, which stands comparison with offerings from the likes of IBM and Borland. So XML is a potential differentiator."

Oracle's Magee says the XML work will help build out the company's ongoing application server integration strategy. The use of XML to share data between various enterprise software packages running on an application server is key to Oracle's Web services and consolidation strategies. If Oracle can make apps from SAP, PeopleSoft or whomever work well together, it may give customers a good reason to pick the Oracle App Server over IBM or BEA.

Governor, however, notes that Oracle's backing of XML appears to wane at times.

"Oracle tends to be a little conflicted when it comes to XML and Web Services," he said. "Larry Ellison still argues strongly that the only way to deliver interoperable applications is to base them on a common data model and architecture. XML on the other hand, is associated with broader notions of interoperability based on API standardization, business document parsing, message passing, and just in time translation. It is intriguing therefore that the XML project is placed in New Jersey, about as far from the Redwood Shores campus as the U.S. continent allows"

Magee says Oracle is a big fan of XML for certain tasks but agrees that the company sees serious limitations for the technology.

"XML is a hugely important technology for sharing data, but it is not a panacea for all your integration problems," he said. "I've heard Larry say, 'Just because you can pick up the phone and call France doesn't mean you can understand what they are saying.'"

Vendors need to come up with more standardized definitions for representing a business process or type of customer, for example, before truly interoperable applications can arrive, according to Magee.

XML aside, the arrival of the Bluestone developers at Oracle also puts to bed a nasty chapter in HP's history. HP paid $470 million to acquire Bluestone in 2000. The company sold the Bluestone application server - aka NetAction - for awhile, then decided to give it away for free and then last year abandoned the business altogether.

"The Bluestone purchase and subsequent collapse represent a text book case in how not to do an acquisition," said Redmonk's Governor. "The transaction didn't exactly create shareholder value."

Still, given the huge market share leads of IBM and BEA in the app server space, HP may well have been right to give up on Bluestone in the end.

"Getting out of the app server market remains the right decision though-HP's relationship with BEA is too important to both firms to mess up," Governor said.

HP has decided to become a BEA and Microsoft shipping station instead of selling its own kit. This software strategy follows its moves in the server business where HP has killed its own chips in favor of Intel's Itanic processor. It seems there's too much to invent these days for HP to fiddle with processors and the like. Designing toner cartridges can be very demanding.

HP rival Sun Microsystems is sticking it out in the app server business. The company hopes to revive software sales with the release of the Orion stack later this year, which will package the Sun ONE App Server along with myriad other apps for about $100 per employee.

Despite being one of Sun's closest partners, Oracle says the Sun ONE App Server has seen better days. As far as Oracle is concerned, it's a three horse race. ®

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