Analysts React Favorably to BEA’s SOA Pitch, but Questions Remain

Yesterday BEA held its annual analyst day, in conjunction with its BEA World conference, in San Francisco.

BEA told the assembled market watchers that long-term targets for revenue growth and margin expansion were sustainable through 2008, with revenue growth of 10 percent to 15 percent resulting in margin expansion of two to four percentage points.

Cited as a prime contributor to those results, and serving as a theme for the proceedings, was BEA’s SOA 360 platform, which bundles the company’s Tuxedo, WebLogic, and Aqualogic programs into an integrated on-demand platform.

Technical details on how the disparate products would converge into SOA 360, however, were vague, as were dates for specific deliverables. BEA promised all would be clarified in good time, and pointed out that it would take nearly two years for the full product architecture to be consummated.

Apparently that was all the market analysts needed to put in a favorable word with their investment clientele. BEA shares were up today on the service-oriented architecture (SOA) news, and at least a few analysts spoke glowingly of BEA’s market prospects.

That seems a bit overdone to me. BEA still needs to fill in much of the detail on SOA 360, and it faces stiff competition from Oracle, HP (with Mercury Interactive), WebMethods, and others. A looming threat, as it has been in nearly every other jurisdiction of software infrastructure, is the open-source software movement, represented in the SOA space by vendors such as LogicBlaze.

All BEA really did yesterday was keep pace with the evolutionary vision of SOA. For some analysts, that was enough of a reason to look more favorably on the company’s market prospects. For my part, I’m deferring judgment, both because I want to see more detail and execution from BEA and also because I want to see what cards are played by the other vendors in this space.

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