Competition Intensifies Among EAI Players

Application server player BEA Systems apparently sparked the spat over a press release from technology research Crimson Consulting about the software maker’s integration products.

The report, which BEA helped fund, claimed the enterprise application integration provider’s software performed 28 percent faster in a lab test against its EAI competitor webMethods .

Rallying to respond — and with no small amount of righteous indignation — webMethods issued its own press release, which challenged BEA to undergo the same performance test, only this time, by using an independent, third-party agency.

And thus began another version of “trash-talking” among two rival software companies. As the playbook for these duels go, it was bolstered by marketing department-inspired press releases designed to ultimately convince customers to drop their precious IT dollars on the companies’ respective application integration and other end-to-end products.

It’s surely not the first or last clash among independent software vendors (ISVs) such as webMethods against the end-to-end providers in the enterprise application integration (EAI) market.

But analysts and experts say this time, the battle is more intense as the enterprise software sector matures and major vendors such as BEA, IBM , SAP and Oracle look for new features to add into their own enterprise software products.

As commoditization encroaches on application server systems, which have become a staple of enterprise software providers, pure-play companies such as webMethods are feeling the competitive pressure.

Scott Opitz, webMethods’ senior vice president of marketing and business development, said he doesn’t know how any kind of legitimate comparison of the companies’ products could be run, since neither BEA nor Crimson consulting own a valid license to the webMethods software.

“We take the success of our customers very seriously and cannot allow
inherently biased attempts to influence the market to go unanswered,” he said.

“When you go to the (Crimson) site, you see a very proud quote
from a vice president of marketing from BEA as a happy customer of
Crimson Consulting. They look more like a marketing company that helps you write a white paper.”

Kathy Quirk, integration analyst at Nucleus Research noted that integration is a very competitive market right now. “Traditional EAI vendors such as webMethods are now facing competition from people like BEA, Oracle, IBM — infrastructure software providers who are adding integration into their software stacks,” she said.

“There’s also the Web services approach that’s coming into play. Its one of the top areas companies are still spending a lot of money on right now, so obviously everyone’s battling after more of the integration market, so that tends to make things a little more heated.”

Sniping at the competition is a time-honored practice in the technology industry, just one more way to differentiate one product line from others. In the tech world, this is usually accomplished by running simulated tests (a la, bakeoff) of two competing products. It’s not especially difficult to set up conditions that favor one brand of software over the other.

BEA officials, for their part, stand by the validity of the test results published last week, regardless of the fact they paid Crimson to conduct it.

“Commissioning third-party studies, I don’t think, is actually that
unusual in the industry,” said Peter Linkin, BEA’s director of product
marketing. “Oracle, for sure, has done a bunch of them, Tibco, too. If you look at the report, it’s 36 pages and everything — every instance, every assumption and every minute of activity side-by-side using a stopwatch — was openly documented.”

But webMethods’ Opitz disputed whether the tests are valid, asking for details on the the firm’s scientific method it applied to the testing criteria. You either get two completely uninitiated computers users to do a side-by-side assessment, he said, or two clearly expert users who are extremely knowledgeable.

“We actually keep track very carefully whenever we’re involved with a
proof of concepts in a competitive situation,” he said. “We put our
best-trained systems engineers into a proof of concept but we don’t get to design the criteria, our customers do.”

BEA’s Linkin said the reason the report was commissioned — with webMethods as the target — was because webMethods is considered a good representative of pure-play integration software vendors in the industry, and is a fairly recognized brand.

“Maybe to an untrained eye it looks like they’re accumulating a
platform,” he said. “But frankly, there’s a big difference between
accumulating a bunch of separate components from different companies and putting a ribbon around it and saying, ‘hey, that’s a platform,'” Linkin added.

Nucleus Research’s Quirk said while company statements often tout their wares, “you usually would not see reactions like this directly and so quickly,” she said of the dueling press releases. “There are companies in the past that have done an awful lot of negative ads back and forth, but this stuff is coming more quickly.”

The intensity comes as researchers, such as Gartner, find that in the second quarter of 2003, middleware, portal and integration ISVs have witnessed a 10 percent drop in licensing revenues from the same time in 2002. However, Gartner said BEA was the only one in the sector to show gains in licensing revenues during the same timeframe.

But Quirk isn’t convinced the methods seen by both BEA and webMethods last week serve any purpose.

“Where’s the value to customers in exercises like this?” she said. “I
think a better use of time and effort could be spent looking at their
respective customers, and look at real-world situations; because we’ve
looked at both companies and their technologies, and spoken with
customers who have achieved a very good ROI (return on investment) with both of the products.”

As to whether BEA plans to respond to the webMethods challenge, Linkin
was coy. “If people have an issue with any of the assumptions in the report, let them look at the real data in terms of license revenues, in terms of customers,” he said. “I hope that people can make up their own minds on that basis.”

Which could be another challenge in the making.

updates prior version to clarify that Crimson Consulting issued the original press release about research that was funded by BEA.

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