BEA Systems Inc. held a wide lead in the Unix and Linux portions of the application server software market in North America in 2003, but its overall revenues in this market shrank by 4.3 per cent while IBM Corp.’s grew by 6.4 per cent, according to a report released this month by IDC.

BEA still is the application server software market share leader in North America, however, with 30.6 per cent of the market compared to 27.6 per cent for IBM, according to the report obtained by Infoworld (U.S.).

On Linux systems, BEA revenues grew 166.2 per cent, from US$15.7 million in 2002 to US$41.8 in 2003, giving BEA a 25.2 market share for application servers on Linux last year. But IBM also grew, from US$7.6 million in 2002 to US$19 million in last year, a growth rate of 148.3 that gave the company a market share of 11.5 per cent in Linux.

Oracle Corp.’s market share on Linux was 10.3 per cent in 2003. But revenues grew 122.4 per cent from US$7.7 million to US$17.1 million. JBoss Group Inc., which offers its application server through a free, open source format but sells maintenance services, saw its Linux revenues grow from US$300,000 in 2002 to US$2 million 2003, a growth rate of 614.2 per cent, according to the report.

In Unix, BEA had 40.1 per cent of the Unix market last year, far ahead of IBM, with 18.8 per cent of the market. But BEA’s Unix revenues dropped 13.4 per cent in Unix, to US$225.3 million as opposed to US$260.2 million in 2002.

The author of the report explained that apples-to-apples comparisons in the application server market can be misleading. “Oracle bundles its integration server and even its portal into what it calls an application server,” said author Dennis Byron, business process automation and deployment software research analyst at IDC.

“I think the strategy of bundling together their integration server and application server products is a good one,” Byron said. “(Oracle is) the best one at looking at what Microsoft is doing in this market and trying to react to it.”

Byron cited a June IDC media release that reported 4.4 per cent growth to slightly more than US$7 billion in the worldwide application deployment software market, which includes application, Web and integration servers, and message-oriented, transaction-server and access-integration middleware. When looking at Linux- and Unix-based application deployment software markets, BEA continued to hold leads in both. Oracle, however, grew at a rate of three times the market average, according to IDC.

Overall on all operating environments, revenues for application server software by BEA in North America reported in the July study were down from US$313.8 million in 2002 to US$300.5 million last year. BEA had application server software revenues of US$319.1 million in 2001. IBM has seen application server revenues grow from US$204.6 million in 2001 to US$254.6 million in 2002 and US$270.9 million in 2003.

Coming in third was Oracle, which had a 17.4 market share and saw total North American revenues grow 11.2 per cent in 2003 to US$170.8 million. The company had application server sales of US$153.6 million in 2002 and US$156.4 in 2001. Behind Oracle was Sun Microsystems Inc., with 4.9 per cent market share, a drop of 10.9 per cent. Sun has seen revenues slip from US$105 million in 2002 to US$54 million in 2002 and US$48.1 million last year. IDC attributes this to pricing and bundling strategies at Sun, including integrating software packages together as one system.

Microsoft Corp. is listed in the study as having US$4.8 million in application server software sales in 2003, up from nothing the previous two years. These revenues result primarily from support of business process automation marketing efforts, according to IDC.

IDC’s study specifies that application server software platforms supply a minimum set of services for deploying interoperable components. Application server products perform functions such as business logic and event monitoring integration and/or transactional and analytical application integration. Java, while the basis of application server platforms from companies such as BEA and IBM, is not specifically cited in IDC’s market definition.

Worldwide in 2003, IBM lead the pack in application server software with US$630 million in sales, followed by BEA with US$566.9 million. But IBM’s sales were bolstered by US$94.5 million from its mainframe systems. Oracle took third place with US$417.7 million in sales globally.

Overall, application server software sales in North America and worldwide were flat for the year 2003 over 2002, but this actually represents a recovery from market deflation from 2001 to 2002, according to IDC.

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