BEA Chief Downplays Open-Source Alternatives

Q&A: CEO of BEA Systems Alfred Chuang discusses recent acquisitions and defends the company's core application server technology against an open-source approach.

Alfred Chuang, CEO of BEA Systems Inc., said BEA is a thought leader in the world of SOA (service-oriented architecture) with its WebLogic and AquaLogic product lines, along with its new portal strategy fueled by the acquisition of Plumtree Software earlier this year.

In an interview with eWEEK senior editor Darryl K. Taft at BEAWorld Beijing 2005 last month, Chuang also staunchly defends his companys core application server technology against open-source alternatives.

Which of the recent acquisitions have been the most strategic for BEA?

How do you define strategic? We buy two or three different kinds of companies. One is a change vehicle kind of company. Theyre not necessarily the most strategic from a product direction perspective. Others are strategic when it comes to adding people and talent in an area that would take a long time for us to build critical mass. And then the third kind would be technologically strategic in terms of building our product line.

So I think that Plumtree is big enough to be strategic. And its being led by Mark Carges ... by a guy who I trust enormously and has been with the company forever. Hes very, very talented and very smart, been in sales, and has done everything in this company. And well use that as a vehicle to change the way we do things in the company.

Otherwise, you know, were getting big, we have 4,500 people and we keep growing and getting comfortable, and after a while you lose sight of the real out-of-the-box thinking. So weve bought some very strategic companies from the perspective of having some very talented people. Like ConnecTerra in the RFID space.

/zimages/4/28571.gifClick here to read about BEAs pledge to make China an IT world power.

Representing another type of acquisition are the companies we bought to fill our technological voids—like getting the EJB 3.0 [Enterprise Java Beans 3.0] going, satisfying the market for the blended environment.

The joke inside the company is what company are we buying this month or this week, since weve been at it pretty aggressively. And the likelihood is we wont stop. People are guessing about how we will manage them.

M7 is strategic from a classic technological perspective. What they have done wouldve taken us way too long to try to reinvent. Even though its just a small group of people, they spent seven years on it. It would take BEA 10 times the people and five times the time. So that has to be a buy, not a build. SolarMetric also is a classic example of buying technology.

I figured Plumtree was the plum in the batch of acquisitions when you put former CTO Mark Carges in charge. Lots of folks asked why you would put him there and some even wondered if it was a demotion.

Its a promotion. The other thing we have to groom in the company is we have to groom more people that are CEO quality. And these are the people you cannot hire. Look at Adobe; look at companies that are bigger than us. Look at Microsoft as an example. Have they been able to hire CEOs or COO type people, and they survive? They cant because culturally in a software company it is so hard. So you have to groom. And you need more of these CEO-like people. If I get run over by a truck outside this building then thered be somebody ready to step up.

We have to be able to do big things and big things require people that think beyond just development or in silos. But when you grow so fast you groom a lot of people that grew up in the silos.

/zimages/4/28571.gifClick here to read more about BEAs recent acquisitions.

You get someone like Bill [Gates] and he is so unique in so many aspects, that you get people who try to follow in his footsteps. And thats the expectation people have. So unless you spend enough time on it and this becomes engendered in the company, you just wont get there.

Whats the uptake for AquaLogic been like? Are there differences between the uptake of AquaLogic in the states versus here in China?

Almost all the sales of AquaLogic are in the states at this time. No company would be in their right mind if theyre not talking SOA. Every major architect is talking SOA. So, all the purchases are all in the U.S. at this point in time. What surprised me, though, is we have landed some very large solo deals with AquaLogic. I didnt know it was going to be so fast.

Solo meaning new customers or existing customers?

Well, new customers and existing customers, but just buying AquaLogic, not because of WebLogic. So they look at it as a completely different kind of product. AOL is a good example. They have bought all kinds of stuff in the past, but weve sold a multi-million-dollar deal into them last quarter and its all AquaLogic. That is stunning to me. We didnt know that was going to happen so quickly.

Right. Its now about execution. And that question continues to come up, the one about sales and breaking new ground with your new AquaLogic product line.

We are selling to people we have never sold to before, ever. Were selling it to .Net shops and we never imagined we would be. Microsoft is taking us to .Net shops because theyre viewing it as a piece of neutral, independent software.

So were getting into territory weve never been in. We sold a large amount to a utility company in San Francisco last quarter that was a 100 percent SAP shop. Now theyre going to blend SAP and some WebLogic development to build their own portal. We never thought of that.

Next Page: The impact of open-source competition.