IBM woos Valtech, attacks BEA

Ilaina Jonas

NEW YORK: International Business Machines Corp. ratcheted up the competition

Monday against Web platform maker BEA Systems Inc., wooing a software

consultancy over to help it steal business from its rival and close the

leadership position BEA is expected to retain, according to a new Giga study.

Paris-based information technology consultant group Valtech said it has

forged a close relationship with IBM, under which Valtech will be IBM's

recommended experts to help companies get the most out of IBM's WebSphere

application server.

Valtech will train IBM WebSphere customers how to implement the software and

optimize it for their business.

Up until now, Valtech has been working with BEA, helping companies learn to

use and adapt BEA's WebLogic to their business. IBM said it intends to not only

muscle in on that relationship, but also use Valtech to help companies switch

from WebLogic to WebSphere should they chose to.

"We're going to leverage our partnership with Valtech to got after BEA

and to take accounts away and win new accounts," Scott Hebner WebSphere

director of marketing.

Application servers, which are software not hardware as their name suggests,

form a platform on which developers build their programs. They also link

front-facing Web pages with back office databases, transaction and other

critical systems which store, save and manipulate critical information and

processes.

Giga expects the J2EE application server market to be about $2.25 billion in

2001. The figure represents represents little or no growth from 2000, as the

worldwide technology spending impacts the sector and uncertainty about a

recovery is even greater since the attack on the World Trade Center Sept. 11

In a further attack on BEA's market, IBM said it plans to bundle its

WebSphere line of products in its new iSeries hardware servers for small-and

medium-sized businesses. The bundled products start shipping this month.

These moves are IBM's most recent salvos in its declared war against BEA. Up

until this year, BEA's WebLogic has been the unequivocal leader in the

application server sector. However, over the past year, IBM has made WebLogic

its target, has gained market share, with the intention of becoming the market

leader by the end of the year, said Hebner said.

IBM boasts such customers as Disney Co., Ford Motor Co. and the U.S. Internal

Revenue Service, while BEA lists heavyweights British Telecommunications Plc ,

DuPont Co. and GE Financial, General Electric Co.'s . largest division among its

customers.

According to Giga Information Group, BEA is expected to retain its lead in

the market for Java 2 Enterprise Edition (J2EE) application servers, retaining

the 36 percent market share - based on revenue - it commanded in 2000. IBM's

share is expected to grow to 34 per cent, up from 31 per cent last year.

IBM is expected to achieve that growth through capturing revenue that had

gone to smaller vendors, which had about 8 percent of the market in 2000 but are

expected to have only about 3 percent this year as the application market

consolidates, according to the research study.

"Given BEA's ongoing strength in independent software vendor commitments

as well as system integrators and other indirect channels, Giga expects the

company to maintain its position as market leader, and it is also well

positioned for the larger battle around the entire application platform,"

Giga analyst Mike Gilpin said in the report.

IBM's WebSphere still suffers from a more complex and less integrated product

line, but on the other hand, it has a broader set of capacities, Gilpin said in

the report. In addition, IBM has its giant Global Services army to guide

customers over the bumps and difficulties of implementing the product.

"IBM will continue to play form its strengths - services, application

integration, development tools and platform breadth - to challenge BEA for the

leadership position, but both are well enough positioned for the long term that

Giga does not expect the market dynamics to change significantly should they

move a few points of market share one way or the other, or trade the lead,"

he wrote.

Oracle, which also has come on strong in the application sever space is

expected to eat away at Sun Microsystem's iPlanet application server, capturing

five per cent of the market, up from three per cent. Meanwhile Sun/iPlanet's

share is expected to shrink form nine per cent to seven per cent. Iona also is

expected to grow in the market, to a three per cent share, up from one per cent.

(C) Reuters Limited 2001.