Will BEA go begging?

You know it and I know it: The best technology doesn’t always win. Case in point — BEA Systems, whose just concluded BEAWorld conference garnered little buzz. (Coincidentally, the newly independent VMware held its annual shindig at the same time and the same venue — San Francisco’s Moscone Center — and attracted five times the number of participants.) The WebLogic app server has a well-deserved reputation as a rock-solid platform, and BEAS, as Wall Street calls it, was one of the first to spot the potential of SOA. But the business software vendor has underperformed for some time. One reason: Customers are afraid the Silicon Valley-based company will be sold, leaving them high and dry, says Trip Chowdhry, managing director of Global Equities Research.

Those fears became even more acute late last week when Carl Icahn (called a financier by those who like him; a corporate raider by those who don’t) upped his stake in the company to 8.5% and said management should put it on the block.

With all due respect to Icahn’s track record, a sale is still a long shot. Sanford Bernstein analyst Charles DiBona, for instance, notes that many of the usual BEAS buyout suspects now seem uninterested. Oracle, always the rumored buyer, is too far down the road with Fusion, its own infrastructure play. SAP won’t buy the company unless it is ready to admit that NetWeaver is a flop (don’t bet on that), and the private equity market has gone way south. That leaves Hewlett-Packard and IBM on the list. IBM? Hardly. There’d be major anti-trust issues, and having two competing platforms in the stable isn’t the Big Blue way. H-P? Not impossible, but the odds are long. (For the record, Chowdhry figures that a buyer is likely to materialize.)

The bottom line: Uncertainty over the company’s future will continue to give customers pause. And investors will ride a roller coaster as the stock spikes on rumors of a sale and then slides as they fade.

Note to readers: I’ve covered the business of technology for nearly 25 years and I’m proud to add my voice to InfoWorld’s outstanding lineup of columnists and bloggers. I’ll be giving you the inside scoop on how Wall Street is treating the technology industry and what that means to you. I won’t always be right, but I’ll always be upfront. And speaking of which, I occasionally put my money where my mouth is, that is, I do buy and sell tech stocks. Should I have a significant position in a company I’m writing about, I’ll let you know. I’m here to listen to your comments, tips and ideas. You can reach me at bill.snyder@sbcglobal.net.