BEA, in turn, "has developed a winning--but no longer market-dominant--integrated technology platform. The company's ability to generate revenue growth and consistent profits from its enterprise accounts is suspect," he wrote. BEA's current market valuation is less than $5 billion, or about "what Microsoft generates annually in cash reserves," and its stock "languished in 2003," he added.
Microsoft's stock, on the other hand, has "underperformed in 2003 at a level the company rarely has seen, remaining virtually flat," as other technology companies regained some of their lost strength, he wrote. Both Microsoft and BEA are going to have trouble making enterprise account revenue increases in 2004 that would change the expectations built into their current stock valuations, he continued.
By acquiring BEA, Microsoft would combine its .Net strength in development tools with BEA's strength in its Workshop Java development environment. "For the foreseeable future, the IT world will remain solidly behind both Java 2 Enterprise Edition and .Net. Microsoft would do well to recognize this and embrace J2EE as a viable and necessary yin to Windows' yang," he wrote.
By offering a software stack that could move up the enterprise food chain without a Windows-only lock-in, Microsoft would pose an enticing choice to IT managers trying to cut costs. With Microsoft the typically low-price leader in the market, "CIOs would be wise to choose BEA on Windows over a Linux, enterprise Java and open source components mix," Gardner's research note said. Such a mix could add to the data center's complexity compared to a BEA application server and tools working smoothly with Microsoft's Windows and tools.
Microsoft has a $50 billion war chest with which to execute such a move, and without it, "there is a real risk of stagnation and a diminishing role for Microsoft's influence over the direction of independent software vendors, hosting organizations, enterprise architects ," and governments seeking to avoid vendor lock-in, Gardner wrote.
Subsea cable alternatives can provide a level of comfort for those concerned about disruptions. Realistically, they will continue to play a small, but critical role in the short term.
Maintaining existing network infrastructures often incurs huge technical debt before newer technologies are adopted over time.
Amid ongoing regional uncertainties, telecom infrastructure in the Middle East has expand to include terrestrial low-latency network infrastructure, which offers resilience and agility in navigating political complexities without relying solely on undersea networks.
