BEA left languishing after iPlanet mix up

BEA's stock fell 23 per cent on Tuesday and Wednesday, following reports that iPlanet - its main rival - is trying to drive the company out of business.

US reports had suggested that iPlanet - the Sun/Netscape alliance - was trying to achieve this by leveraging its relationship with Sun and the fact that 66 per cent of BEA WebLogic deployment is on the Solaris operating system.

Sun, however, put the rumours down to a misunderstanding over a bundling exercise between Sun Solaris and BEA WebLogic.

BEA addressed analysts and investors today, claiming that participants did not seem concerned by the news now the matter had been cleared up. The problem, according to Kevin Faulkner VP investor relations at BEA, was that stock prices sometimes take time to recover, as investors re-evaluate their positions.

It is still unclear what statement from iPlanet and Sun led to the misconception. iPlanet has yet to issue an official statement explaining the situation clearly.

An iPlanet spokeswoman said she hoped a statement would be available soon. She pointed out that the two companies have done "aggressive co-marketing" and from time-to-time Sun does ship iPlanet "evaluation kit" for developers with Solaris, but nothing but the iPlanet directory was integrated with Solaris.

Even before the misunderstanding became clear, city analysts at Credit Suisse First Boston (CSFB) were telling investors that BEA was a "strong buy".

In its daily briefing note to technology shareholders CSFB stated: "While the knee-jerk reaction might produce heightened concern as it relates to BEA's prospects with its WebLogic application server, we believe that upon peeling back the onion the implications are relatively insignificant for a variety of reasons.

"BEA has achieved dominant market share in the application server area. We believe iPlanet's application server is regarded as an inferior product relative to BEA's WebLogic, IBM WebSphere, Oracle App Server and MSFT, in part because it is the by-product of three acquisitions - Kiva, NetDynamics, Forte - that have yet to be integrated."

By Andy Favell