BEA Expanding Its Reach, CEO Says

In an interview with eWEEK senior writer Darryl K. Taft, Alfred Chuang says BEA Systems has "an endless appetite for doing new things," including an ESB for short-span messages.

BEA is a company on the move. And with its annual eWorld conference only weeks away, its promising big things for Java developers. Alfred Chuang, BEA Systems Inc.s affable chairman and CEO, spoke with eWEEK senior writer Darryl K. Taft last month about some of the issues surrounding the company. He also gave a few hints on what one might expect to see in the near term from the San Jose, Calif.-based Java infrastructure company.

How do you address the comment that BEA is just an application server company?

Well, I dont get offended by anything. If we were only an app server company and weve built a billion-dollar app server company, I think it is wonderful. This would be like when people were saying that Oracle is just a database company. Well, they built a $10 billion business, thats not bad. They have 45 percent operating profit; no one is bitching about that.

Its like saying Microsoft is a Windows company; it used to be a DOS company, and its made some of the richest people in the world. I think thats all cool. Infrastructure works. Everybody sees infrastructure software generate more profit than anything else—23 percent operating margins generate $300 million gross cash in a year. Thats not a bad business.

But the reality is when you look at what we reported last quarter, especially in the integration business, we generated $100 million in license revenue. Some of the other stuff is a little bit harder to specifically quantify, like portal, the impact of Workshop into selling—we sold 14 percent of our sales in the Platform SKU. And JRockit is the most highly proliferated JVM [Java virtual machine] out there in the marketplace.

We introduced a bunch of new products—Liquid Data, WebLogic Enterprise Security. So, I think the reality is weve been moving and expanding into the platform space and leading it way before anybody does it. So, if that is called an app server, Im OK with it.

IBM is your most direct competitor, and both you and IBM make claims about each other. BEA people say IBM fudges its reporting, and they say you charge more on the maintenance end. Whats the truth of the matter?

Well, I think the truth is something that nobody knows. This is the problem. I mean if you look at the most recent IBM report, their Software Group was the poorest performer in the company, which is supposed to be bringing in the most margins.

So, the way I look at it is they dont have to report actual numbers in terms of bookings and revenue on their distributed software. They never have to report that because theyre such a large conglomerate. So its difficult for me to say how we fare in terms of really competing with them. We have too, though.

We have to give out very specific numbers about this product category I have to certify for. So, this is really a certification contest more than anything. So, if they would step up and certify the numbers that they have actually generated, that would be very interesting to see.

The reality is this is a company thats been doing data processing for close to 100 years. Every one of our customers is, or they used to be, IBMs customers. So, we have to fight every day to bring these customers to us. And a lot of times, we have to convince the customers to switch.

So, these 15,000 customers that we have, I bet most of them if not all used to be IBM customers, or theyre still also IBMs customers. And IBM sells a lot of things to these people. I think thats just the reality of competition out there. Theyre a big conglomerate, and I think weve got to beat them by the merit and innovation in the marketplace, which I think we do pretty well.

Next Page: Expanding on the Workshop tool.