Framingham, Mass-based IDC reports that the market didn't show the growth it had in the previous two years, but predicts that as the economic situation improves, significant opportunities exist for the leading application server software vendors.
"By the early part of the year, it was clear that vendors had settled on Java 2 Enterprise Edition (J2EE) as the common standard for application server software," said Michele Rosen, research manager for IDC's Business Process Automation and Deployment Software program. "This decision rapidly drove commoditization and price pressure, as smaller vendors struggled to differentiate themselves from the leading vendors."
In "Worldwide Application Server Software Platform Forecast," IDC reports that BEA Systems and IBM further established themselves as the premier application server platform vendors in 2001. While BEA continues to lead the market, the gap between BEA and IBM is narrowing significantly. IBM increased its market share from 15 percent in 2000 to 23 percent in 2001, according to IDC. Between the two companies, they now generate 48 percent of market's revenue.
Dataquest, a division of Stamford, Conn.-based Gartner, agreed that 2001 was a relatively slow year for the application server software market as revenue grew only 20 percent (to $1.18 billion from $990 million in 2000), which was down from 92 percent growth in 2000.
Dataquest also views the market as a two-horse race, with BEA narrowly beating IBM with 34 percent of new license revenue compared to Big Blue's 31 percent. In a distant third, according to Dataquest, was Sun with 9 percent of the market.
"The application server segment is splitting into low-end and high-end server solutions. On the high-end, IBM and BEA are pushing the millions of transactions per minute threshold. On the low-end, HP and Microsoft are basically offering the good enough 'free' technology to go after the small-to-medium size business and the low-end transaction processing markets," said Joanne Correia, vice president for Gartner Dataquest's Software Industry Research group.