App servers: the main vendor offerings analysed

Who's raking it in? Who's going places?

The application server software market exploded at the end of the nineties and now, with the expected rise of web services, four or five of the biggest IT players are planning to own chunks of it. Kate Hanaghan considers the main contestants. The application server market is dominated by two players, currently accounting for around two-thirds of all revenue. For the past year they've cast a huge shadow over the rest of the market, doing their best not to give anyone else a look in. Locked at the horns is the way BEA and IBM have been described - until now, that is. Research due to be published next month by IDC indicates IBM is about to pull ahead. The complete report will be out in mid-June but initial findings show IBM has come from behind to gain a 10 to 12 per cent lead on revenues derived from app server licences in Europe. Previous IDC figures from last year gave BEA a four per cent lead. The new figures from IDC are so significant because Europe is a bit of a hotspot for IBM - more so than the US. Furthermore, this could be a taste of things to come and indicate something even more worrying for BEA. Analyst and author of the new IDC research, Rob Hailstone, says if current trends continue IBM will take the worldwide number one spot. The products at the heart of this highly-contested number one spot are BEA's WebLogic server and IBM's WebSphere. Both currently rely heavily on the spend of early adopters.
But it won't stay that way forever. When the technology filters down to the middle tier of users, the landscape of the market could be skewed even further in IBM's favour. James Governor, analyst at Illuminata, thinks IBM will really come into its own when the market reaches this phase of adoption. BEA, however, remains unconvinced by this suggestion. The company is also none-too-impressed with the way so many IBM products fall under the WebSphere brand. It says this makes calculating app server-specific revenues impossible. Ian Doyle, senior architect at BEA, told silicon.com: "IBM's approach to WebSphere is as a branding umbrella for a range of products including its J2EE server and its MQS messaging series. There are in excess of 100 products under the WebSphere name and most are not Java-based." However, Hailstone is certain IDC can sufficiently split the revenues of WebSphere to analyse app server revenues. Yet in the face of this, BEA is standing by its claim it is the number one app server vendor. As for IBM taking this highly-cherished spot, BEA's Doyle said: "We don't believe that's going to happen." Doyle quotes figures from Meta Group for 2001 deployments - market share for deployed J2EE application servers was 37 per cent for BEA and 22 per cent for IBM. He also mentions Gartner research - published six months ago - showing BEA's worldwide market share to be 41 per cent and IBM's 31 per cent. But these are last year's figures. We're almost half way through 2002 and the situation appears to be changing. No wonder BEA is clinging to last year's statistics with the new data from IDC showing a pattern emerging against it. Whatever the claims of BEA and IBM, AMR Research contends the situation now is one of "technical parity" across the market. Equally important is Microsoft's increasing momentum - a company often left out of the top four and a relatively quiet player. AMR's research shows that with the power of the .Net platform behind it, Microsoft is heading towards completing the leading app server pack. Also with market share of note - around five per cent or higher - are Sun and Oracle. They each have issues holding back their progress. IDC's Hailstone said: "Oracle hasn't won the hearts and minds in the same way as IBM and BEA. And Sun's not had a good year, although it's about to make an announcement of some new features." Sun is still in the midst of bringing its iPlanet server back into the fold. Although, as Illuminata's Governor points out, if it can build on the success of its directory server it can begin to win market share. In Oracle's favour, he adds, is the company's interesting position with its recent 9iAS product. "App servers become more difficult to manage the more applications you add," he said and this, he claims, is something Oracle is good at dealing with. The issue, therefore, represents "a significant opportunity for Oracle," according to Governor. BEA's Doyle is not, however, convinced. He believes Oracle is not in the app server market for the same reason as his company. He said: "Oracle's core competency is in databases. They are just using the app server market to extend their database customers. The question is will Oracle sell its app server separately?" Below Oracle and Sun is another tier of numerous smaller players including big names in IT such as HP and Sybase. With analysts arguing the technology has become commoditised, similar across the numerous vendor offerings, all eyes will be on the marketing and distribution clout of each player. Smaller companies are likely to struggle against an IBM, which to date has done an excellent job of marketing its app server. Marketing will certainly be important. Illuminta's Governor said: "HP's total-e-server has an elegant architecture and the company has a fantastic management framework in OpenView. But customers want more meat on the bones and the company will have to work hard to market products around them and build a solid channel." Against a landscape that has yet to settle, look out for Microsoft and its ubiquitous .Net arsenal and a war of words between BEA and IBM that is set to run and run.