IBM, BEA even in app server market

IBM Corp. and BEA Systems Inc. tied for first place in terms of revenue in the market for J2EE (Java 2 Enterprise Edition) application servers in 2001, according to new research by the Giga Information Group Inc.

The research, released Wednesday by Giga, pegs both IBM and BEA as holding 34 per cent of the revenue generated in the J2EE server market in 2001, followed by Sun Microsystems Inc.’s iPlanet unit with seven per cent, Oracle Corp. with six per cent, Sybase Inc. with four per cent, Hewlett-Packard Co. with three per cent and miscellaneous others with a total of 12 per cent. In 2001, the market’s revenue grew overall by 39 per cent, to a total value of US$2.19 billion, according to the report, which was written by Giga analyst Mike Gilpin.

Both Armonk, N.Y.-based IBM and Oracle saw 50 per cent growth rates over 2001, according to Giga. IBM’s sales grew because it significantly enhanced its WebSphere application server product and because it tuned the product to support Web services. Meanwhile, San Jose, California-based BEA grew around 30 per cent year-over-year, which, given the state of economy, is a strong figure, Gilpin wrote. Cambridge, Mass.-based Giga expects BEA will maintain its leadership position, despite its lower growth rate in 2001, the report said.

Though “all the vendors (in the report) have a large enough market share to have a sustainable application server business,” large market share has its benefits, the report said. IBM and BEA’s leadership positions in the market will cause software developers to ensure that their products run better on IBM and BEA platforms and will create stronger backing for the platforms from systems integrators, Gilpin wrote.

Users of market leading software should “view this revised financial information as being largely a non-event,” the report states. Companies using application servers with a less than three per cent market share should consider switching to another product with a more solid presence, Gilpin wrote. However, there are good cases in which these application servers which have small market shares software can be used, so companies should evaluate their own needs carefully before switching, he wrote.