With its recent $US192 million acquisition of application server vendor WebLogic, BEA Systems took a big step toward marrying transaction processing systems to the Web.
This is the latest move by a company that intends to become the "Home Depot of middleware", says co-founder Ed Scott, referring to the one-stop-shopping philosophy of the nationwide home-improvement retailer.
"We've been a public company for six quarters, and we've been exceeding Wall Street analysts' expectations every quarter," says Scott, whose company turned a profit in fiscal 1998 and more than doubled its revenue from the previous fiscal year.
Middleware, such as BEA's flagship Tuxedo offering, is the unsung and invisible software plumbing that lets applications on a network share information.
For many companies, middleware has been so strategically important that they've invested millions of dollars to build and maintain a middleware framework that knits their key systems together.
"BEA has clearly tapped the value of middleware," says Ted Schadler, an analyst with Forrester Research. "It has a $1.7 billion market capitalisation, all based on middleware. It's kind of shocking, really."
The WebLogic buy is just the latest in a series of BEA acquisitions, which has included the purchase of Tuxedo development and distribution rights from Novell and the buyout of NCR's Top End product line.
The grow-through-acquisition strategy has enabled BEA to rise to the top of the market for distributed transaction processing middleware. The company held a 31 per cent share of the market last year, according to market researcher IDC.
Analysts say BEA's challenges include integrating each newly acquired product line with the company's existing offerings, as well as putting forth a consistent marketing message to potential customers. In addition, the company will have to stay ahead of formidable rivals, such as IBM and Microsoft. Microsoft, meanwhile, is integrating Microsoft Transaction Server and Component object technologies with Windows NT.