BEA Battles the 'Vision Thing'

BEA Battles the 'Vision Thing'

Here's an interesting article on BEA's current struggle with defining its future direction. A lot of the comments sound eerily similar to what people were saying about ATG, another Internet software vendor, two or three years ago. Of course, BEA has $1.8 Billion in cash, so no one is predicting their imminent demise, like they were with ATG back then. ATG is still around, by the way, albeit in a much humbler form.

In 2000, ATG predicted the impending commoditization of the Web application server space. They decided to concede the battle for the app server space and concentrate on commercial applications that were built on top of the app server. It's interesting to see in this article that they were right about the pricing and competitive pressures that application server vendors would face. They were just five years too early in their predictions of when it would happen.

Here are some things I have learned from my ongoing study of Internet software, specifically BEA, ATG, and their competitors:

  1. It's not enough to have the best product. Customers have to understand why it's best for them. Otherwise, they'll be perfectly happy with a mediocre to crappy product that meets their perceived needs. Apple and Microsoft might have something to say on this matter.

  2. Accurately predicting a sea change in your industry might make you a visionary, but it is not enough by itself to make you a succesful business leader. You have to also accurately predict when that change will occur, and make sure you are just barely in front of it. When you get too far ahead of the rest of the competition, you leave your customers behind with them. It's better to spend most of your resources giving customers what they need now, while focusing a small effort on exploring what you think the future will be. That way, you increase your dominance in today's market while positioning yourself for tomorrow's.

  3. If you can't clearly explain your company's vision to either your clients or your customers, maybe you should stop what what you're doing long enough to figure it out. It does no good to sprint off somewhere if no one knows where you're going.

  4. Corollary to #3: if your product is too complicated for the dumbest person in your company to explain, it's too complicated to sell (no commentary on the intelligence of sales people implied, though you can draw your own conclusions).

  5. If you have more money than all of your competitors combined, you can get away with ignoring 1-4, at least for a while.

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