IBM within arms reach of BEA

IBM within arms reach of BEA

IBM continues to build momentum in the application server market, creeping to within three percentage points of BEA Systems according to a report released by market analyst IDC.

IDC's research suggests IBM's Websphere application server worldwide market share grew to 15.4 per cent compared to BEA's 18.2 per cent. It also claimed Websphere's growth rate over 1999 and 2000 was 258 per cent, or about twice the market average. Sun Microsystems finished third with 8 per cent market share.

Mike Stone, BEA's partner manager for Australia, said he is constantly hearing contradicting reports on the race to win the lion's share of the application server business (for example, Giga suggests BEA holds a 35 per cent share as opposed to IDC's estimation of 18.2 per cent). But Stone said he has no confidence in figures suggesting IBM is closing the gap. "The benchmark we use is revenue growth year on year, product to product," he said. "Our core business is the application server [WebLogic], while IBM seem to slap a WebSphere tag on just about every software product which confuses their revenue figures. I would say the gap is widening rather than narrowing."

Stone suggests BEA's solid channel strategy is primarily the reason why some analysts see the vendor as holding the top spot on the application server ladder. The Australian office has signed a new agreement in recent weeks that will see the project services division of application developer Technology One build projects for its customers based on BEA's WebLogic. "We will be focusing more on our partner program in coming months," said Stone.

Many observers, including IDC, expected the application server market to cool off over the course of 2000, but instead it grew even more aggressively.

"It's difficult to overstate the significance of this growth rate. When a market reaches the level the application server software platform market reached in 1999, annual growth usually slows, not accelerates. End users are clearly demonstrating a commitment to moving forward with the distributed, multi-tiered component-based solutions," said Steve Garone, president of IDC's application development and deployment research.

"While I wouldn't say the application server is recession-proof, when times get lean you look to do more with less," said Stone. "So people see the value in the applications server."

In 1999, worldwide revenues in this market grew 110 per cent to $US957 million ($A1.9 billion). But in 2000, revenues grew another 128 per cent to just less than $US2.2

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