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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (11718)	5/22/2002 8:11:58 PM
From: stockman_scott	Respond to of 57684

BEA a nose a head of IBM in software race Wednesday May 22, 8:08 pm Eastern Time NEW YORK, May 22 (Reuters) -IBM inched closer to its goal of overtaking BEA Systems Inc.'s (NasdaqNM:BEAS - News) lead in the race to be No. 1 in the market for software used by businesses to develop the programs that run their operations, according to two separate studies released Wednesday. "It's been a horse race for a couple of years, and I certainly think it's going to continue to be a horse race regardless of which vendor comes out No. 1," International Data Corp. analyst Michele Rosen said. IDC and Gartner Dataquest both put BEA as the leader in the application server market in 2001 but only by a nose, as International Business Machines Corp. (NYSE:IBM - News) continued its momentum and gained even more market share. The gain came at the expense of Sun Microsystems Inc. (NasdaqNM:SUNW - News) IDC said BEA retained its No. 1 position in 2001, with 24.8 percent of the market, according to software and maintenance revenue figures, up from 18 percent. Its revenue grew by 38.9 percent. IBM captured 23 percent of the market, up from 15.4 percent the year before. Its revenue grew by 50 percent. "IBM has the momentum now, but BEA is beginning to address the challenges that it faces in terms of being what was previously perceived of really as a one-product vendor," Rosen said. The deciding factor may be an elusive "must-have" new technology that pushes customers to start buying again. The technology spending slump has affected the application market, which in 2000 grew by 102 percent but slowed to 10.5 percent last year, according to IDC. Rosen said she expects the slump to last through 2002. With 12.1 percent of the market, Oracle Corp.(NasdaqNM:ORCL - News) came in a distant third, replacing Sun. Its revenue grew by 56.1 percent as it came out with application server software based on Java 2 Enterprise Edition, based on Sun's Java language. During the year, J2EE became a common standard, slowing the market as the standardization helped drive prices down. Products, especially from smaller vendors, became less distinct from one maker to the next. The effects from Sept. 11 made a bad situation worse, Rosen said. Sun ended the year with 7.9 percent of its market. The company has been handicapped by being a player in the application server market, while promoting Java to its competitors. On Tuesday, Sun released a new application server it will package in it dramatic upgrade of its operating system, Solaris. The company intends to include the iPlanet application server in Solaris 9. IDC expects the application server market to reach a compound annual growth rate of 14.7 percent from 2001 through 2006, when IDC expects the market as a whole to be worth $4.4 billion. Gartner, which bases its number only on software sales, also said BEA retained the No. 1 position with 34 percent of the market, up from 33 percent. IBM followed closely with 31 percent, up from 22 percent and a 71 percent growth in revenue compared with BEA's 23 percent revenue growth.