HP and BEA move the middle way

HP has struck a deal with middleware vendor BEA to resell its popular WebLogic application server software to its enterprise customers.

The move comes despite the fact that HP paid $470m for its own application server technology, Bluestone, in 2000.

Mark Prichard, senior architect for BEA Systems, said: "This is about both HP and BEA looking to focus on our core value adds - they're developing enterprise solutions based on our app server technology."

BEA and HP will work together to jointly deliver infrastructure systems for large customers across all of HP's different computing platforms.

BEA's WebLogic is already compatible with HP's two operating systems HP-UX and Tru 64, but the deal will see the two companies tied together tighter still.

In addition BEA will get access to HP's huge sales force, with HP committed to recommending BEA as its application server of choice.

Currently HP gives away its entry-level NetAction application server - based on the Bluestone technology - for free. HP today refused to say whether the deal meant it had abandoned NetAction completely.

However, the move has been widely anticipated since Peter Blackmore, HP's VP of enterprise systems, told analysts its middleware division was making heavy losses.

Whatever it plans to do, it is true that in facing the increasing commoditisation of the market HP has been unable to distinguish itself from competitors and gain significant market share.

The firm now feels the time has come to cut its losses. Phil Dawson, senior analyst at Meta Group, said: "HP weren't going anywhere with Bluestone - this was a wasted acquisition and is just not a market they can add any kind of value to.

"Now it's up to BEA. If they want this relationship to remain strategic they have to make a major play in the Linux space, and become the app server of choice there. Otherwise HP will put its weight behind Microsoft."

BEA's Mark Prichard deflected talk of commoditisation of the application server market by saying customers are still willing to pay for application servers because the technology is so crucial to the IT infrastructure.

HP was unable to provide a spokesman for this story, but said it would be making an announcement on its middleware strategy in the near future. Watch this space...