Monday, July 26, 2004

A Note on BEA

The recent departure of Adam Bosworth from BEA has many in the industry talking about the overarching issues that seem to be facing that company. As an ex-BEA partner, I witnessed first hand several unfortunate but not so uncommon events take place, including:
- trouble with channel conflicts
- strong sales people being fired (even in very tough environments)
- less than capable people hired into marketing and bizdev
- inability to articulate a new vision
- failure to create an open source strategy 
- failure to answer the IBM global services threat
- inability to create vertical offerings
- chose not to acquire when their stock price was down - despite industry consolidation
Now, I get the feeling that there were more issues on the inside - but I can only tell you what I witnessed from the outside looking in.

In my opinion, BEA was failing during an absolutely critical period of change in the software industry.
- Venture funds over invested and killed the cash cows of medium sized ISV's
- This fortified the positions of the large ISV's (MS, IBM, SAP)
- Customers were moving to process based applications, not technologies
- Large ISV's moved to an agility based packaged app model

This set the stage for:
-- Microsoft building out .Net and growing Microsoft Business Solutions
-- IBM will build out WebSphere and acquire packaged app companies (Siebel, etc.)
-- SAP continuing the component/service push on NetWeaver
-- Oracle continues to build apps and grow the technology platform (Collaxa acquisition, etc.)
All in all, we are seeing a trend; major application companies are going to market with an application platform that they provide. Smaller ISV's are often picking JBoss or .Net. And medium sized businesses are being attacked by aggressive IBM sales teams.

So, where does this leave BEA?
For starters, BEA should have seen this coming and pushed a deal with either SAP or Oracle some time back. Upon seeing that Open Source offerings was having a significant effect on the low end of the ISV market via rapid commoditization, BEA needed to make a move. Going forward, variations of open source models will dominate markets that are easy to commoditize. Integration will likely be on of those markets - technologist understand the use cases. 

The departure of Adam Bosworth is only one of many issues for this company. Although their products are sound (from a Java perspective), they moved extremely slowly in their web services strategy. Could BEA acquire enough companies to be considered a 'service oriented infrastructure' company? Maybe - but the market is up and the web service startups are making sales which will substantially increase their valuations. This makes it much tougher to stomach the acquisitions. Let's say they pull it off. Is it a good move? I'm not sure. Mostly, I think it just keeps them around until the next wave of mergers takes place.

I wish that I could offer BEA some magical advice. It is a company that has been good for the software community. I don't have the answer, but I have some inclinations:
1. From a technical perspective, look beyond Java. And way beyond J2EE.
2. QuickSilver and the ESB space are already commoditized. Back an open source project.
3. Web Services are easy, "Integrated Service Networks" are hard.
4. Understand why people like the idea of a "Google computing platform"
5. Packaged apps will dominate until the build vs. buy dynamics reverse. Unless you plan on being acquired soon, your job is to reverse it. It's that simple.

As I look at these 5 items, I realize that this is good advice for any of the ISV's that plays in the app-dev, or integration space. Here are a couple more things to chew on:
- web services and service networks increase the complexity of the enterprise I.T. stack
- the more moving parts there are the more it costs to bring them together
- not all buyers need the same level of complexity (if only we had J2EE Beginners version, J2EE advanced version, etc.)
- service oriented infrastructure will be most beneficial to very large I.T. shops
- if you refactor software out of the application and into the network, you should be able to reduce the development and integration time - if you didn't; you failed.
- Remember - dBase, PowerBuilder and ColdFusion. Developers like when you make them look like rock stars - give them the tools to beat expectations.

I feel a bit sorry for them, but mostly I'm mad. As the turnover continues at BEA we can be hopeful that they'll either acquire the companies with the talent or bring in some new vision to steer the ship. Despite my frustrations with them, I wish them the best of luck.

No comments: