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Open Source Stoking Hot Middleware Market

AIMing High

  • June 12, 2006
  • By Michael Hickins

IBM and BEA Systems command more than half of the red-hot application integration and middleware (AIM) market combined.

Embracing open source will not only help them keep fast-charging rivals like Microsoft at bay, but may even help them widen the gap.

AIM is a driving force in IT spending--growing at a faster clip than the overall software market--because the solutions help companies integrate new tools with existing legacy systems.

They are also a key component in the trend towards service-oriented architecture (SOA).

"You can't do business intelligence and integrated systems without this set of products," noted Joanne Correia, vice president of software research at Gartner.

Open source now represents just half of 1 percent of that market. But don't be fooled by the seeming insignificance of that number, said Correia, who predicted that open source could have up to 10 percent of the market by 2010.

"You can see the interest in open source for this particular technology from the developer side," she told LinuxPlanet.

"This trend helps vendors that support open source based products," she added.

IBM owns 37 percent of this $8.5 billion market, according to a Gartner study released today, well ahead of its next closest competitor, BEA, which has 15 percent.

IBM's competitive advantages are its huge installed base and the size of its sales force.

"It has a product suite it can upsell to," Correia explained. "And they have 40,000 people on the street selling IBM products. That's more people than there are in the town where I live."

As a pure play in the AIM market, BEA does not have that advantage, said Correia. But she noted that the company is "nicely poised" to defend and even increase its share of the market.

"They have to be excellent--and they are," she said.

She also noted that BEA has established strong strategic relationships with other vendors, like Hewlett-Packard and Sun Microsystems.

Both companies will be helped as more and more companies look to add open source products to their infrastructure.

"Revenue might not grow in terms of new license sales, but in support fees as usage of open source products grow," said Correia.

Oracle is in the third spot, well behind the market leaders, with almost 8 percent of the market. But the company has been coming on strong, having grown by a whopping 40 percent over last year, perhaps fueled in part by its recent moves towards open source technology.

Microsoft has almost 5 percent of the market and grew by an impressive 13 percent, but Correia said the Redmond software vendor has "no chance" of overtaking the leaders in the next 24 months.

"I don't see Microsoft doing $1 billion with BizTalk," she said.

But with $3.1 billion and $1.2 billion, respectively, IBM and BEA are unlikely to be overtaken by either Oracle ($739 million) or Microsoft ($397 million) in this market.

This story first appeared on internetnews.com, a JupiterWeb site.

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