Category Archives: Application Development

Wake Up Call

OK, Microsoft still hasn’t gotten Visual Studio.NET out yet. But Microsoft’s tardiness is hardly the point. We’ve all known for some time what the .NET framework will include, and for developers of distributed, web applications, the welcome news is that there is real competition with J2EE.

We’ve also remarked before of Java being the victim of its own success. Until recently, it was the only game in town for developing scalable web apps, thanks to features like distributed component deployment, database connectivity, messaging interfaces, transaction management and more.

But then there’s the nagging matter of XML web services. Sun was blindsided when XML emerged four years ago, and failed to proactively extend Java by originating web services technologies. Maybe the hangup was a “not invented here” syndrome, or a fear that web services might poach away some of the logic that should otherwise reside in Enterprise Java Beans.

Either way, the consequence is that Sun has ceded thought leadership on the next generation of web application technologies to Microsoft and IBM, who have both internalized web services into their tools. For instance, type “WebMethod” in any Microsoft Visual Studio.NET language, and your code will automatically generate a SOAP message. As for the Java folks, the best that they’ve come up with so far is proprietary tools that do the same things, and for standards, piecemeal responses for things like how to parse XML messages and generate Java classes. We’re wondering what’s keeping the JCP (Java Community Process) from coming out with its own WebMethod equivalent, because generating XML messages is hardly brain surgery.

The game isn’t over. Microsoft hasn’t even gotten version 1 product out yet, the workability of web services has yet to be proven, and the user mainstream is at least 6 – 12 months away from meaningful experimentation with web services. And web services will never be an easy way out to the tough challenges of application integration.

But Microsoft is clearly running with the ball, topping its SOAP act with a proposed Global XML Architecture, that will deal with missing links in web services technologies like security, authentication, and performance.

For the moment, Sun needs to forget about thought leadership. Generating SOAP messages, WSDL service definitions, and UDDI directory listings are no-brainers. Just add a few simple bridges to J2EE and make the whole darn problem a non-issue.

So What Else is New?

In the latest fallout from the Sun/Microsoft Java divorce case, Microsoft has declined to bundle Java Virtual Machines (JVMs) with the upcoming Windows XP operating system. Instead, users accessing web pages with Java in them will be greeted with blanks in parts of the screen, and security warnings if any Java program tries to execute. If you need a JVM, you’ll either have to download it from Microsoft or hopefully get it bundled by your PC manufacturer.

Although the move appears a body blow to Java, in reality, nothing has changed. Java lost the battle for the client years ago, and not just because of Microsoft’s FUD campaign. Users rejected Java on the client because downloading applets and running them added too much computing overhead. Give us Pure HTML. Please.

OK, maybe there might be some inconvenience to users with JavaScript, which Also uses JVMs. Otherwise, the JVM spat is much ado about nothing. That’s because of one thing that Microsoft and Sun actually agree on: In the future, the server will be where the action is. Microsoft has conceded as much by promoting its emerging .NET software-by-Internet-subscription licenses.

Instead, the real battle for the hearts and minds of application development groups and technology vendors will come when the .NET technology framework emerges (probably mid Q4), providing a choice between Java’s write once, run (almost) anywhere vs. Microsoft’s write-in-any-language, run-on-Windows model. At that point, Microsoft will offer a technology answer whose versatility might give Java real competition at last.

Keeping the Lid On

Going to any Linux user group meeting is like engaging in time travel. The utopian ideals about placing software in the public domain have clear sixties rings, and on the surface, appear to be pretty flaky ways to develop software. Yet the success of Apache and the recent move by “adults” like IBM to form a group for testing approved Linux distributions has demonstrated that the open source “bazaar” is not so bizarre.

More to the point, open source has placed traditional “good guys” of the open systems world on the defensive. If your software is so open, why not release the source code? The issue has dogged Sun because Java was supposed to be the politically correct answer to the Microsoft juggernaut. Yet the best that Sun would venture was opening Java to a “community process” where it remained first among equals.

Microsoft has also been knocked for a loop by open source. As part of its .NET rollouts, Microsoft recently responded with the “Shared Development Process” (SDP), throwing in Hailstorm services as the first SDP guinea pig. There will actually be three levels of SDP, from review to peer development and arms-length industry working groups. Microsoft is clearly stepping gingerly, in that it has not committed to submitting other technologies (beyond mentioning the possibility of BizTalk industry frameworks) through the new process. But SDP has clear boundaries. Crown jewels like the Windows.NET platform won’t go into anything resembling community development.

Clearly, the success of open source has required the industry to make politically correct noises. But economics, rather than sound bytes, are really driving the quest for community-like alternatives. The seeming chaos of open source has actually proven a rather efficient mechanism for attracting third, fourth, or even fifth-party developers who can transform foundation technologies, such as OSs or application frameworks, into de facto standards.

The bottom line however is that open or community source involves, not just forgoing some level of control, but revenue opportunities as well. In an economic climate where technology vendor margins are strained, the question whether to hold on to the rights to every last piece of intellectual property is no longer so clear.

Java One 2001: Waiting for the Other Shoe to Drop

Java is becoming a victim of its own success. For now, J2EE has become the only game in town for scalable web applications. Even SAP, which until now was wedded to Microsoft’s web architecture, has bitten the bullet with its own J2EE-based remake of MySAP.com. SAP couldn’t wait for .NET, or for upstarts like BroadVision to steal its thunder B2B-ERP’s next frontier.

But this year’s Java One was more noticeable for what wasn’t there: Real XML integration and real use for products coming from Java’s next frontier, the embedded device. Not surprisingly, most of the questions at Sun’s opening press conference were about its sagging quarterly numbers, not Java.

With .NET knocking on J2EE’s door, Sun is now stealing a page from Microsoft. In the next few months, it will release “service packs” offering goodies such as Java XML binding, rather than wait for the release of J2EE 1.4, now at least 6 – 8 months away.

At least at the enterprise end of Java, there are real stakes to fight about. At the other end of the spectrum, embedded Java, there is little if any agreement on whether J2ME (Java 2 Micro Edition, which was originally aimed at this sector) is adequate, or whether you need the security features of J2SE (Standard Edition, designed for PC clients). Or, whether Sun’s KVM is the right Java Virtual Machine, or whether “clean room” versions from players like HP or Kada are better sized for the job. And finally, can the world do with just the MIDP profile (which specifies all the Java classes), or whether PDAs merit their own “Palm Profile?”

That there is debate isn’t notable. Instead, the operable question is whether there is a market. The proprietary OSs of Palm, RIM, and Pocket PC devices have proven little obstacles to today’s killer hand-held apps: calendar and address book. The benefits of Java on phones won’t matter much until advanced 2.5 or 3G networks proliferate the landscape. The same goes for putting Java or whatever on advanced set top boxes, which await broadband rollout. Even AT&T Broadband, which had signed an almost exclusive agreement with Microsoft, is now hedging its bets.

The message from Java One 2001? Keep deploying J2EE e-business servers. For anything else, wait ’till next year.

IBM WebSphere Finally Supports Mainframe

It’s little surprise that a key ingredient of IBM WebSphere’s success has been its support of existing IBM technologies—especially DB2 databases, plus the availability of bodies from IBM Global Services which has built an e-business practice around WebSphere. If you’re a confirmed IBM shop, WebSphere has long been your logical choice for web-enabling legacy applications.

But until now, running WebSphere on the mainframe was essentially like running a port of an open systems tool in a legacy environment. WebSphere 4.0 for z/OS and OS/390, released this week, adds native support for core mainframe services such as CICS, the transaction monitor that IBM claims runs 40 billion transactions every day. Specifically, WebSphere 4.0 allows Java application developers to plug into these transaction services without having to write custom code. WebSphere 4.0 does the same thing with other established mainframe building blocks such as Parallel Sysplex; IBM’s RACF security and access control programs; and WLM, IBM’s workload manager used for load balancing.

Version 4.0 is also the first release of WebSphere that is officially J2EE (Java 2 Enterprise Edition)-compliant. Not only that, but it’s the “deepest and broadest” implementation of J2EE, claimed Scott Hebner, middleware marketing director for IBM Software. He said that IBM passed more J2EE compliance tests than any other appserver vendor, including all the mandatory tests and 70% of the optional ones run by Sun. For instance, IBM claims that its implementation of JMS (Java Messaging Service, one of the J2EE standards) is more mature than BEA’s, its primary rival in the appserver space. For instance, IBM claims that BEA WebLogic lacks the ability to import transactions originating as MQSeries messages (IBM’s market-leading messaging middleware). BEA was not available for comment at press time.

To place matters into perspective, IBM’s J2EE fervor is rather recent. They admit to being slower in becoming J2EE-compliant than the other Java appserver rivals. “We took a balanced approach to supporting standards since we originally did not believe that J2EE was the only [important] platform,” said Hebner. He claimed that other standards, such as XML-based UDDI and SOAP, were equally important (see adjacent story). Hebner added that WebSphere supported all the J2EE essentials anyway. “We supported EJB 1.1 ‘minus’,” he said. For instance, while IBM supported essential EJB features such as session beans, until now it didn’t support peripheral ones such as XML descriptors. “Our clients weren’t using them [XML descriptors] anyway,” he maintained.

The WebSphere 4.0 announcements were accompanied by an important upgrade to Visual Age, IBM’s umbrella IDE (integrated development environment) used for developing many of the applications that run on WebSphere. For the first time, IBM is finally offering Visual Age as a suite, bundling all languages including C, C++, COBOL, and Java into the same package. In so doing, IBM is following the lead of other tools vendors, such as Microsoft, Rational, Sybase—and just recently, CA.

CA Throws Hat in Development Suites

Application life cycle tools were an afterthought of Computer Associates’ 1999 Platinum acquisition. Ironically, thanks to its acquisitions of Platinum technologies, Sterling Software, and Nantucket (the latter, over a decade ago), CA has accumulated one of the largest application development product portfolios in the business.

Not that anybody noticed—CA included. With the sole exception of Nantucket, none of these acquisitions were driven by application development tools. Platinum was bought for its DB2 tools, while Sterling was acquired for its storage management offerings, both of which neatly complemented CA’s data center products.

This week, CA raised the profile of its application development business with the release of ERwin Modeling Suite 4.0. Don’t let the version number of the product name fool you, this is actually CA’s first attempt to bundle development tools. It’s just that ERwin and Paradigm Plus, the product families included in the suite, both happen to be on their 4.0 release cycles, according to application life cycle brand manager Gregory Clancy. The result is CA’s first serious challenge to market leader Rational.

ERwin modeling suite contains four products, headlined by the ERwin data modeler, the market leader for database designers; plus BPwin, a business process modeler; Paradigm Plus, a UML modeling tool; and the almost brand-new ERwin Examiner, a tool which checks data models for inconsistencies. The products are also sold separately.

Each of these products has significant enhancements. ERwin sports new capabilities for separating logical and physical models. The logical model organizes data into entities, such as “customer” or “product order,” while the physical model maps them into the table and column data structures of relational databases. By separating logical from physical, data models can be spun off for multiple databases, a feature that is useful if an organization has different databases (e.g., Oracle and DB2) and wants to ensure that overlapping data uses the same data structures. Additionally, ERwin has added new model viewing capabilities that provide hierarchical views of data models, a feature that makes it easier to work with larger models.

Other product enhancements include Paradigm Plus’ support of UML 1.3 (the latest version of the object modeling language), XML-based round-trip engineering, and the ability to extend the tool using well-known VBScript or JavaScript. Meanwhile BPwin has added organization chart views and the ability to import bit map graphics—but does not support direct import of Microsoft Visio charts, which many organizations use for illustrating process flows.

So how do these tools integrate? CA is relying on XML to provide an open interface, and for translating data models into UML models, wizards are provided. This differs from Rational’s proprietary hooks, although Rational’s integration is far more ambitious, spanning object modeling, data modeling, testing, requirements management, and configuration management. However, if CA could broaden the XML integration to other tools inherited from the Platinum stable, such as CCC Harvest, it could claim a useful competitive advantage.

ERwin Modeling Suite 4.0 is an important first step for CA to demonstrate that rumors of the attrition of its inherited tools businesses are greatly exaggerated. CA has headroom for product growth, if it follows up by extending the suite to other tools inherited from the Platinum stable, including configuration management.

Clancy conceded that, in the aftermath of the Platinum acquisition, it was often difficult to get the world’s attention on the company’s development products offerings. With the exception of ERwin, none of these products were market leaders. But Clancy adds, these products have “grown significantly” under CA’s watch, noting that channel sales for modeling tools alone grew 344% over the past 16 months (he did not have figures for sales growth via direct or telesales)..

Obviously, integrating data modeling and object/component modeling has long been a holy grail of application development—but does the idea make sense in practice? Database architects and component designers are each jealous of their domains. In most cases, the database predates the application. “Just ignore the other side, data is king,” is a common refrain, according to one industry consultant who has worked both sides of the modeling fence.

The application life cycle market remains fragmented, with market leader Rational, Compuware, Merant, and Computer Associates each offering varying arrays of development and modeling tools. No single vendor offers a complete solution, and until now, only Rational has offered out-of-the-box integration.

The significance of ERwin 4.0 is that CA is finally demonstrating that it is serious in pursuing the development tools business, and that Rational finally has some competition in the suites sector.

iPlanet Adds EAI, XML Support

As part of its ongoing absorption of Forte products, iPlanet has added new JMS and XML interfaces between its application server flagship and its EAI and B2B e-commerce products.

Specifically, the EAI product—iPlanet Integration Server 2.1, a.k.a. Forte Fusion, has added support for Java Messaging Service (JMS) and HTTPs to allow direct communication with iPlanet Application Server. (XML support was already built in as the product’s core integration building block.) That will make it easier to build web commerce applications that interact with enterprise applications such as SAP or PeopleSoft.

iPlanet ECXpert 3.5 (the B2B product), which serves as an integration and translation hub for documents in EDI, email, and other formats, has belatedly added XML support, including parsing, translation, and support to XML communications over HTTP (with SSL encryption). Not surprisingly, it does not yet support SOAP, a Microsoft-developed protocol for communicating XML transactions over HTTP, which has drawn support from heavyweights such as Ariba, Commerce One, Compaq, and IBM.

Added to its existing JMS support, the EAI and B2B modules can now communicate with iPlanet Application Server, or any other J2EE-compliant appservers equivalent.

The JMS and XML support are necessary first steps for iPlanet to cobble together its offerings into what it bills a new “Integration Platform.” ECXpert is simply one of several iPlanet e-commerce modules, which also cover automated procurement and sell-side applications, credit authorization transactions, and market makers (its answer to Ariba and Commerce One).

In the long run, iPlanet plans to make all of these components of a common web commerce application platform. It still has a ways to go; iPlanet Application Server, ECXpert, and Integration server are still three separate products with different architectures and look-and-feels. IPlanet says it will eventually provide integration — a sizable task — but has wisely not committed itself to deadline dates.

The primary advantage today is that all products are supported by the same vendor. Today’s announcement adds J2EE integration to provide the same type of integration as if the products came from different vendors. It’s just a first step.

Software Configuration Market Heats Up

Software configuration management (SCM) systems have long been the Rodney Dangerfields (the American comedian “who gets no respect’) of the tools market. Although not at the top of most checklists, virtually every development team with ongoing projects usually has some version control tool in place to keep developers from tripping over old code.

In most cases, the systems have been limited to workgroups numbering at most 20 – 30 developers. The tools are either primitive homegrown applications or databases, off-the-shelf products limited to 20-30 person workgroups, although a couple repository-based, enterprise-scale offerings, including of Merant’s PVCS Dimensions or Rational’s ClearCASE, have emerged. But in most cases, the tools have been taken for granted.

With today’s release of Rational Suite 2001, the latest in a round of semi-annual rollouts by Rational, competition in the entry-level SCM (software configuration management) market has ratcheted up. In additional to other tools covering the AD life cycle, the new Rational Suite includes ClearCASE LT, a new low-end version of the company’s existing SCM offering.

Offered as part of the suite or a la carte at $1500/seat, ClearCASE LT is roughly at price parity with PCVS Professional, the best-known workgroup-level tool—and is roughly half the cost of enterprise-level offerings. Rational’s pitch is that, unlike other workgroup offerings, which also include the free, open-source CVS; Starbase, the web-oriented tool often embedded with Java frameworks; and Microsoft’s Visual SourceSafe; ClearCASE LT is actually a miniature version of the full enterprise product. The implication is that migration paths should be easier. By comparison, to go from PCVS Professional to PVCS Enterprise requires an automated wizard that parses out data from the workgroup product’s flat files into the federated database and source code repository structure of its enterprise equivalent.

For AD teams, the choice is not just around which tool provides upgrade paths, but what other goodies may come alongside it. For instance, while Rational offers unified change management, a component of Rational’s unified process, Merant has begun offering standalone companion tools that track changes in packaged applications, beginning with Oracle Financials (it might eventually integrate them). Other common features high on AD team checklists are defect tracking, issue management, change management, and requirements management.

Thanks to e-business, AD teams are having to cope with more complex, highly intertwined applications that must be developed on increasingly short fuses. That’s placed a premium on buying suites or best-of-breed solutions, rather than point tools. However, due to workflow variability and the shortcomings of today’s repository technologies, no vendor yet offers a completely open, integrated solution spanning the entire AD life cycle, from designer to developer and tester. For that, we will probably have to wait for XML frameworks.

Nonetheless, the renewed attention to SCM points out that this is becoming one of the hottest contested portions of the AD tools space. That’s ironic given that Rational’s 1997 acquisition of PureAtria (the source of ClearCASE) was initially given such poor reviews by Wall Street.

HP Buys Bluestone

The web application server business just got a bit more consolidated, with HP’s acquisition of Bluestone Software, announced during Fall Internet World in New York. As websites begin adding industrial strength commerce and transaction processing the application server has become strategic linchpin. As J2EE standards mature, the application server itself is becoming commodity. There is little room left for niche middleware players. For too long, Bluestone has been the small software company with big technology.

Why have application servers so important to the web, and why have they become strategic application platforms for major e-business hardware and software vendors?

In short, the answer is scalability, availability, and reliability. When an ad appears on television or when B2B trading partners begin collaborating on their supply chains, web commerce sites cannot afford to slow down or fail. And lesson one for any e-business application designer is that, compared to internal applications, those that reach outside the enterprise cannot easily control or predict their user bases and transaction loads.

The logical approach to providing always-on capability is to start distributing databases and business logic on different machines, so capacity can quickly be added wherever and whenever it is needed. In e-commerce, it’s hard to know when you’re going to need another database or application machine. And, in so doing, industrial strength application and database management strategies grow necessary, because loads must be balanced and failover must be applied. While distributed architectures did not start with the web, the web has made them more mission-critical.

Because the web is inherently stateless, the housekeeping functions traditionally performed by the operating system must be performed by something else. Although the database could—and in many cases does—perform services such as persistence and object/relational mapping, the conventional wisdom in high-end web application design is to move that overhead to the application layer, because the database is already pretty busy. Enter the application server. With Oracle 9i, even the venerable database vendor has gotten the message, elevating the application server to the same prominence as its database.

With the emergence of J2EE (Java 2 Enterprise Edition), a framework has emerged that specifies transaction and related services, including object/relational mapping, database transaction persistence, component generation, web page generation, along with APIs to directory services, transaction management, messaging and database access. Today, J2EE is the dominant architecture for web applications that are serious about scalability.

That makes the application server an increasingly strategic buy. Ask most web teams about their short list, BEA WebLogic, IBM WebSphere, and iPlanet (formerly Netscape) Application Server generally make the first cut. Significantly, two of the three are legacy buys—IBM, because of the natural link with mainframe operations; iPlanet, because of its Netscape heritage; and BEA, because they were extremely aggressive in hopping on EJBs before everyone else. What’s also interesting are the once-popular names that are no longer there: NetDynamics, which embraced Java, but not Java Beans, early, and HAHT, whose architecture was C++ based.

Today’s second tier survivors are players that were willing to embrace the J2EE transition and eat their young. SilverStream, which like NetDynamics, embraced Java early, has recently migrated its architecture from proprietary Java components to J2EE; Iona and Gemstone, whose roots were in the ORB and object database fields, respectively, repositioning their technologies as building blocks of J2EE servers.

Last, but not least is Bluestone, which probably made the toughest transition of all. Like HAHT, it had its own proprietary development language (Sapphire), and it was largely C and C++ based. A couple versions ago, Bluestone bit the bullet and made a wholesale migration to a complete Java architecture, rather than take the path of least resistance by “protecting” its legacy base and making only cosmetic changes at the API level. Yes, it would provide migration tools to Sapphire customers, but no, it wouldn’t continue the dated architecture.

It has made some smart technology bets, beginning with its early emphasis on load balancing and failover, which are now taken for granted in the space. Bluestone also hopped the XML bandwagon early, initially with a giveaway XML server product that it eventually incorporated into the core platform. Recently, Bluestone made a shrewd acquisition of Arjuna, a German software firm that developed the first Java-based transaction server, which provides a needed counterweight to BEA’s trove of database-oriented middleware.

The dilemma remained: Bluestone generally got high marks for technology, was effective at getting its message out, but remained stuck in second-tier position in a product category which emerging standards were transforming into a commodity. In short, it faced the usual battle for niche software vendors: swallow quickly or get swallowed up.

HP to the Rescue

Bluestone, which exhibited typical performance for the early stages of a public company, was beginning to show signs that it might finally enter the black. Annual revenues have doubled year over year through 1999, and three quarters in CY and FY 2000, they have already hit the 2x mark, at $28 million. But the company, which focuses on large accounts, has been heavily reliant on its top 10 customers, which last year accounted for over half the revenues. With Enterprise Java technology becoming commodity, it needs the critical mass to convince large accounts that it would be safe to buy Bluestone products.

As the last major software player without an application server strategy, HP Software Division’s acquisition of Bluestone at first glance appears quite logical. HP has recently begun making waves to challenge Sun’s dominance of the e-business space, courtesy of more powerful hardware, tighter relationships with Oracle, a new e-Services initiative, and a president—Carly Fiorina—who is striving to shake the company of its plodding, consensus-driven culture, with a more entrepreneurial focus that is more open to risk taking.

To the uninitiated observer, HP Software sounds like an oxymoron. The company’s tagline, “Invent,” harkens back to a history where clever engineers did neat things devising electronic instruments in the backs of their garages. The company has always had a strong product engineering bias. This author is currently working with one of the fruits of that culture: a 10-year old HP LaserJet II-P which continues to effortlessly turn out 4 pages of high-quality copy every minute, refusing to become obsolete.

But then again, the old AT&T had a similar reputation. Its products were built to last, and with Bell Labs it had state-of-the-art R&D. Chances are, if you took the company up on its offer to buy the phones that it used to rent, prior to the company’s 1984 split-up, chances are the units would still be ringing. Yet, the technology business is littered with the corpses of engineering-driven companies that were tone deaf to marketing, with AT&T the poster child. The Baby Bells spun off from AT&T, which were left with lower margin businesses, have reinvented themselves, with many of them looking far more attractive to investors than Ma Bell herself. Yet, as this report was going to press, AT&T was trying to extricate itself from its latest missteps by once again breaking up the company into business units that might make smarter decisions.

When we look at HP Software, we think of OpenView, a product that invented SMTP network management market. And, in spite of HP’s neglect, OpenView’s Network Node manager has managed to remain the gold standard for network management, even as rivals like CA and BMC begin adding sexier neural network/genetic algorithm technologies to do forward prediction of network operations. This is the same OpenView that withstood the HP hardware company’s embrace of CA’s Unicenter two years ago as the preferred framework for HP-UX platforms.

Since then, HP has formed a software business unit around OpenView. Like IBM Software, HP is striving to form a real software business from a vast array of market-leading and obscure point products. With OpenView providing the pillar into enterprise computing, HP began enunciating its strategy for e-business. the other major pillar of the software: The e-Speak XML framework, and e-Process, for providing high-level tools for designing and managing e-business workflows.

e-Speak, a framework of XML-related, covers XML communications, and the management of XML transaction services. In other words, the concept is sufficiently broad yet vaguely defined that at this point it is difficult to tell whether it will compete with competing frameworks from players such as Microsoft. e-Process is more tangible, currently consisting of ChangeEngine, a tool for developing e-Business processes and workflows, and HP Service Delivery, a telecommunications solution which embeds the WebMethods Enterprise EAI engine.

Bluestone fills a key gap in HP’s e-business solutions strategy. Previously, HP attempted to partner closely with BEA/WebLogic, but found itself in a position where it was in the passenger, not the driver seat, when it came to selling e-business solutions. HP realized that, to make its way to the table, it had to put skin the game.

For both HP and Bluestone, the acquisition didn’t come out of the blue. Both have been gradually ramping up their relationship since they announced an interface between Bluestone’s Total e-Business and HP’s ChangeEngine earlier this year. And the possibilities of leveraging Bluestone’s XML server capabilities could go far in helping HP flesh out its e-Services product framework.

Appserver Acquisitions: A Tale of Two Cities

The application server market provides good examples of what can go right—and wrong—from similar acquisitions. The track records of BEA and WebLogic; and Sun, Netscape, and NetDynamics, provide black and white examples.

Prior to the WebLogic acquisition, BEA itself was a collection of formerly independent and orphaned middleware tools. It was best known for rescuing Tuxedo, the leading third party UNIX TP Monitor, from Ray Noorda’s Novell, where it had languished as part of the company’s failed effort to become the center of the UNIX Universe. (At the time, Novell owned the remains of UNIX Systems Labs, the former AT&T rival to the Open Software Foundation.)

Back to BEA, the company struggled cobbling along a middleware strategy during the client/server era against the wrath of Oracle. BEA’s battle was uphill for other reasons as well. The TP monitor notion was both behind and ahead of its time, and it was an invisible technology that was marketed during a time when most enterprise IT organizations were preoccupied fighting the ERP wars.

For BEA, WebLogic itself came along at an especially auspicious time. With client-side Java reeling from performance and Microsoft-induced marketing problems, WebLogic was the first to get its arms around Enterprise Java Beans (EJBs). It would sell EJB appservers before EJBs were even a spec. WebLogic had compelling technology, but no feet on the street. BEA was looking for a hot product that would make the rest of its strategy make sense.

The result became, in effect, a reverse acquisition. BEA bought WebLogic, and although it kept its corporate name, the WebLogic product line surged front and center. BEA used its existing middleware products, such as Tuxedo, to lend more weight to WebLogic, and in so doing won the perception battle. WebLogic Enterprise may be a group of products, but in customer eyes, they often regard Tuxedo as WebLogic’s back end. Today, WebLogic is the leading J2EE application server in market share.

On the other end, the Sun acquisitions, which are now part of the iPlanet family, have suffered more lukewarm fates. Netscape originally claimed the mindshare for large-scale application servers largely thanks to its companion webserver and browser product lines. NetDynamics was known as one of the earliest application servers that used Java. However, because both products predated J2EE and EJBs, their internals weren’t Java-based. That in effect made them proprietary software products that just happened to use Java. The result was, when server-based Java standards emerged, neither could provide the degree of openness that was part of the Java promise.

When Sun bought NetDynamics, the company was one of the top players in the low-end appservers space. However, after it acquired NetDynamics, the company lost key personnel, and more importantly, market momentum, given Sun’s lack of experience in marketing software. By the time that Sun acquired Netscape’s application software business, spinning it off as iPlanet, it grew obvious that the NetDynamics’ product line’s days were numbered, given Sun’s strategy to tackle higher-end accounts. IPlanet’s execution, not its strategy, was flawed. It delayed in getting the message out to NetDynamics and Netscape customers, and in so doing, lost market share (in many cases, to BEA).

Since then, Sun has also folded Forte into iPlanet. Significantly, the management team that was responsible for Forte’s revival in fortunes did not survive the acquisition. Today, iPlanet’s software business continues to be run by the same management team responsible for the slow NetDynamics/Netscape consolidation. Significantly, the team lacks anyone experienced in the software business.

Bluestone’s Opportunities

A major condition of acquisitions, especially those that look good on paper, is cultural fit. On one level, there shouldn’t be a problem: both companies have traditionally been very engineering-driven. But in the e-business market, that is not necessarily an advantage.

Another concern is the general question that arises anytime a large company swallows a smaller one: Will the buyer stifle the speed and agility of the buyee. The concern is especially acute for HP, which acted in characteristic, consensus driven fashion while courting Bluestone. Obviously, acquisitions aren’t casual matters, but once the deal is consummated, the newly joined parties must be braced to jump ahead at Internet speed.

From recent history, it appears obvious what must happen for HP’s Bluestone acquisition to pay off: Steal a page from BEA and make it a reverse acquisition.

On this front, the early news is good: Bluestone will become the headquarters of HP Software’s Middleware Division, with Bluestone president Kevin Kilroy taking over the unit. And, when it comes to e-business middleware, HP is almost a blank slate, with one obscure product and another that is still primarily high concept. Compared to other large recent acquisitions, Bluestone should have relatively few feet to step on. Lets hope it still has the feet to do the stepping. HP must hang onto Bluestone’s development organization, which knows a thing or two about change.

The Middleware Group should call the shots when it comes to e-business platform product direction, sales, and marketing, rather than waiting for consensus. There are obvious synergies with OpenView, which can be used to manage the back end systems that feed web commerce. And it shouldn’t shy away from rebranding: Who knows what ChangeEngine and HP Service Delivery really mean anyway? All e-business products should share a common branding—Bluestone Total e-Business and HP e-services and ChangeWhatever, alike. They need to mobilize all the feet on the street, from sales to service. The last part could be tricky, especially if HP’s crazy obsession to spend $20 billion on PwC diverts badly needed resources.

And, as long as we’re shaking things up, how about getting the web site up to date? Today, the web page containing the production description for HP Service Delivery lists Active Software’s ActiveWorks as the integration engine. For the record, WebMethods acquired Active Software back in May, and subsequently renamed the product WebMethods Enterprise.

Is the Sun Setting on Sun?

Those are certainly fighting words. Sun has enjoyed a nice five-year run thanks to two factors: Its smart acquisition of the “right” portion of Cray, giving it the E10000 Starfires, and its invention of Java, the de facto language of e-Business.

Sun is still doing quite nicely, thank you. Q2 results beat the Street by a penny, as order streams avoided Y2K slowdowns. By comparison, HP’s Q4 was weak.

However, a few warning signs recently emerged. Sun’s once-cozy relationship with Oracle has grown more arms-length, now that HP is threatening to become first among equals. HP also won a high-profile deal at Amazon, although it was debatable whether HP clinched the deal with faster clockspeeds or fatter financing.

HP has recently made some shrewd moves in the promising ASP space, especially with its $500 million investment in building SAP hosting centers with Qwest. By comparison, what did Sun do with its $500 million? It bought Forte. Question: Which $500 million investment will be more lucrative in the long run?

These events should serve as wake-up calls for Sun. While all good things eventually come to an end, Sun’s e-Business ride still has plenty of upside ahead. But it shouldn’t fool itself. Java may make Sun relevant to dot coms, but as more enterprises adopt dot com strategies, they will need ASPs to get them there—and that’s where the bucks will be. HP is making the right noises and investments, but the jury is still out on whether it can execute in Internet time. That’s never been Sun’s problem, but going forward, it needs to cop some ASP wins to ensure that McNealy and Co. remain the dot in dot com.