BEA lines up partners for midmarket push

Aiming at midsize businesses, BEA Systems Inc. is lining up a series of partnerships with resellers and ISVs (independent software vendors) to offer server software packages based on its WebLogic products, a company executive said.

The software packages will be based on components from BEA’s WebLogic Platform 8.1, which includes an application server, portal server and integration server, combined with applications and services from its partners, said Charles Ill, BEA executive vice president of worldwide sales, in a recent interview.

BEA sells the bulk of its software to large enterprises and counts some of the world’s biggest businesses among its customers. By expanding its partnerships with resellers and ISVs, BEA hopes to find new business among smaller companies that have traditionally viewed its software as too complex or too pricey to use.

The packaged offerings, which will also be available to existing customers, will be based on simplified versions of BEA’s WebLogic server products that include fewer features and are priced lower than its existing enterprise offerings, Ill said.

“We’ll have offerings for what I’d describe as small businesses that would be essentially easy to use. There are ease of use capabilities in our current platform, but it’s not sized and priced to fit a smaller business environment,” he said.

The packaged offerings will be aimed at organizations with annual revenue of approximately US$100 million to $500 million, a BEA representative said. Businesses of that size typically aren’t interested in buying an entire “platform” of infrastructure software such as BEA’s WebLogic, Ill said.

“They’re not looking for infrastructure, they’re looking for a solution to a business problem, so we’ll have to count very heavily on VARs (value-added resellers) and our ISVs to help us hit that marketplace. The customer at the end of the day is going to be buying what (the resellers and VARs) bring to the table and what they’ve built on top of our infrastructure. We will have specific answers to those marketplaces,” he said.

BEA declined to discuss specifics before the offerings are officially announced. A BEA representative suggested that they will address areas such as customer relationship management, self-service portals for employees and digital dashboards, which pull together information from sources to provide executives with, for example, a view of recent sales in a particular region.

BEA also declined to discuss delivery dates for the offerings, but said it expects to sign deals with new U.S. resellers in the next 30 to 45 days. The company will roll out the packaged offerings throughout 2004, the BEA representative said.

With IT spending at large corporations still in a slump, many enterprise software vendors have looked to smaller companies for growth. IBM Corp., one of BEA’s biggest rivals, launched an Express family of products late last year that have fewer features and are priced lower than its enterprise offerings.

Ill, who was a top sales executive with IBM’s software group before joining BEA, said BEA’s offerings will be “slightly different” from IBM’s Express line, of which he was critical.

“It’s a platform offering at that kind of level. But look at IBM’s Portal Express — I think it hasn’t been very successful. Why? Because it’s too complex and it’s just infrastructure, there are no solutions built on it. What we will bring is ease of use, ease of implementation, and there (will be) solutions built on our platforms.

“What we’ll do is just screw down the pricing and screw down the authorized capabilities of the software,” he said.

Despite his criticisms, IBM gained a substantial head start with its Express family of products. The company launched 13 Express offerings for small and medium-size businesses (SMBs) in the past year, including a version of its DB2 database, and is investing heavily in what it sees as an important potential growth area, an IBM spokesman said.

“For companies like IBM, SMB is the promised land — a growth driver the likes of which the industry hasn’t seen for years,” the spokesman said in an e-mail about IBM’s products for smaller customers.

The midmarket push aligns with a broader effort at BEA to make better use of resellers to boost sales of its products, particularly in the Americas, where until now it has not depended heavily on resellers. Company executives told an audience of financial analysts earlier this month that BEA would step up its reseller program, in part to compete more effectively with IBM, Ill said.

IBM has had a “free run in that territory” in the Americas because BEA historically has not paid attention to it, Ill said. The company now hopes to change that.

“We are going to use resellers and I think they are a great way to extend our distribution, and I think it’s an opportunity for us. If we can do it effectively I think we can make some significant inroads and do some damage to IBM in the process,” Ill said.

The company recently signed its first reseller partner in the U.S., Logicalis of Bloomfield Hills, Michigan, a BEA representative said. Logicalis is also a close IBM partner.

BEA generates more than 40 percent of its revenue through its partners, which also include systems integrators such as Accenture Ltd. and BearingPoint Inc., hardware vendors such as Intel Corp. and software vendors such as Documentum Inc., Siebel Systems Inc. and E.piphany Inc.