Application Integration, Middleware Market Remains Strong

IBM's WebSphere franchise led the overall field with about $2.5 billion in revenue for 2004, up 8.7 percent year over year. Its market share inched up to 37.2 percent from 36.3 percent in that time span. Gartner analyst Joanne Correia said IBM is beginning to reap the rewards of its Express products, which target midmarket customers and the solution providers that support them.

In the study, Gartner defined the market to include application servers, integration suites, portals, message-oriented middleware and transaction processing monitors. The IBM portfolio that counted toward the total included MQSeries messaging middleware and WebSphere portal and integration offerings, but not necessarily a lot of the legacy tools that also might carry the WebSphere logo, Correia said.

Application server pioneer BEA Systems saw its revenue slip 7.4 percent to $482.3 million last year. San Jose, Calif.-based BEA accounted for 7.2 percent of the market, the second-largest share, but that figure was down from 8.2 percent in 2003.

Oracle, Redwood Shores, Calif., realized a 12.5 percent year-over-year sales gain in the market, with its revenue climbing to $292.2 million. Microsoft, meanwhile, saw the biggest sales increase in the space with a 63.1 percent rise, attributable to its SharePoint Portal Server (SPS) and BizTalk Server products. The Redmond, Wash.-based software giant's market share climbed to 4.3 percent from 2.8 percent.

"Those products have done very well, particularly in the channel," Correia said. The Microsoft figure includes SPS and BizTalk but not the base SharePoint services that ship with Windows 2003 Server.

On the application server side, IBM led with 38.4 share, up from 35.5 percent the year before, and revenue of $473 million, an 11.8 percent year-over-year gain. BEA, in the meantime, saw its app server share dip to 21.7 percent from 26.3 percent and its sales fall 14.7 percent to $267.3 million.

Sandy Carter, vice president of strategy, channels and marketing for IBM WebSphere, said the numbers validate Big Blue's strategy of building atop open-source and open-standards technology. "We also lead the field in linking people and processes, all integrated via service-oriented architectures," she said.

Shawn Willett, analyst at research firm Current Analysis, said IBM has been aggressive in application servers and middleware, while Oracle has built up its credibility in middleware and application integration.

"Oracle has gone from having a 'me too' offering in app servers and integration and made strategic moves to become cutting-edge in some tech areas," Willett said. He cited Oracle's acquisition of Collaxa for business process monitoring and its licensing deals for business-activity monitoring (BAM) and event-processing engine technology.

"They're going out ahead of other companies now. You've got to give them credit," Willett said.