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SOA, Virtualization Jolt App Server Market

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Application server software platforms (ASSP) may be a highly commoditized business, but IBM, Oracle and BEA Systems can still turn a quick buck in the space, thanks to accelerating adoption of virtualization and service-oriented architecture (SOA).

Worldwide sales for application server software grew nearly 6 percent in 2005 to $4.5 billion, according to new research from IDC that analyzed potential growth, as well as potential slowdowns in the market for software that makes applications run.

IBM (Quote) was the overall application server software platform leader in 2005 with 43 percent of the market share, followed by BEA (Quote) and Oracle (Quote) at 17.5 percent and 11 percent, respectively.

BEA led the $2.5 billion market for distributed application server software, which refers to platforms built on J2EE, .NET, or Windows programming languages, with 24.2 percent of the market.

Microsoft grew 29.7 percent in 2005 to take the second spot at 14.9 percent in this market, with IBM and Oracle rounding out the top four at 13.2 percent and 10.4 percent, respectively.

Legacy systems, which include transaction processing software systems built on CICS (define) or CORBA (define) protocols, notched $2 billion as the other major segment of the application server software market.

IBM dominated the legacy market with a 68 percent share; no one else came close.

While the percentage of distributed application servers compared to those of legacy platforms was 56 percent to 44 percent, IDC expects the gap to widen by 2010, with distributed application servers accounting for 63 percent of total ASSP revenue.

Chalk the growth of distributed platforms up to the boom in SOAs (define) and virtualization in the corporate world, said Maureen Fleming, IDC analyst and lead author of the report.

SOAs are distributed computing platforms that allow software such as Web services (define) to be reused, cutting down the development costs of having to rewrite software to make it port to other systems.

Because such SOA-based systems are meant to be modular, CIOs tend to choose more modern, flexible application servers to power them, such as IBM’s WebSphere, BEA’s WebLogic, Oracle’s Application Server 10g and Microsoft’s Windows Server 2003.

These software servers are increasingly starting to virtualize applications, or run several different applications from one operating system; the ability to run several disparate applications on one piece of software or hardware is a huge cost saver.

“We believe that there will be a variety of approaches to virtualization that will affect the market,” Fleming told

These include BEA’s recently announced Weblogic Server Virtual Edition, an application server software appliance running on a hypervisor.

BEA will ratchet up this proposition next summer, adding Liquid Operations Control to WLS-VE, which will essentially be the manager for any Java applications running on virtualized machines, not just those running on BEA’s software.

IBM’s WebSphere Application Server Extended Deployment edition will also enable enterprises to run more applications on fewer physical and virtual servers.

Going forward, Fleming said the number of servers handling workloads associated with application server software will increase at a compound annual growth rate of 11 percent from 2005 to 2010.

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