New Reports Heat Up Application Server Race

A new report from Gartner Dataquest states that while IBM's WebSphere grew a whopping 71 percent in 2001 and captured 31 percent of the market, BEA was still the market leader in terms of new license revenue. According to Gartner's research, BEA's WebLogic, which grew 23 percent last year, was still ahead of IBM with 34 percent of the total market. IBM, however, grew much more than any other vendor in the space.

"The net result of the IT spending slowdown and the more cautious tone for emerging new software companies made IBM a safe bet and helped it pull more application server revenue," wrote Gartner analyst Joanne Correia. "The result was that IBM gained market share of new license revenue at the expense of Sun [Microsystems and other vendors."

IDC's recent study also put BEA at the top of the application server market. The IDC report has not been released yet, but the analyst firm did issue a statement that IBM had narrowed the gap but that IBM was still atop the market.

The new studies from IDC and Gartner offer a stark contrast to earlier reports. Last month, Giga Information Group released its market share study that had IBM and BEA tied for first with 34 percent of the market each. A controversial Hurwitz Group report released last December actually had Oracle as the leading application server vendor in North America based on "organizational penetration," which measured the number of companies that used a particular app server, not license revenue.

The Hurwitz report was contested for two reasons. First, the report didn't consider the volume of application servers sold or how much money customers spent on each brand. Second, its author, Evan Quinn, departed Hurwitz not long after the report was published and now works at Oracle's analyst relations department.

There are other points of contention among the various new reports on the application server market. For example, Gartner's report listed only unbundled application servers and therefore excluded Oracle's 9iAS and Microsoft's Windows-.Net package. Some studies as well had Oracle, Sun and Sybase in alternating positions in the third, fourth and fifth spots. All three own single-digit market shares based on license revenue and were far behind BEA and IBM.

One constant in the reports appears to be the meteoric rise of IBM in the application server market. All studies show remarkable growth for WebSphere and at the very least show IBM in second place. Another similar view among analysts is that the application server market, estimated to be around $2 billion, will continue to grow. Gartner predicts that the market will grow at a compound annual growth rate of 22 percent, reaching $3.2 billion by 2006. IDC forecasts a $4.4 billion application server market for the same year.