BEA Looks to VOIP, SOA

Software giant bucks recent trends by returning to license revenue growth - CEO expects big things from SOAs & VOIP

August 18, 2005

3 Min Read
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BEA Systems Inc.s (Nasdaq: BEAS) second-quarter revenues showed license growth up, despite software industry trends. And execs see VOIP and SOA in the company's future (see BEA Delivers Growth in Q2).

BEA's results, announced last night, show revenues of $285.2 million, 9 percent above the same period last year. The figure was just below analysts’ estimates of $285.88 million.

The company’s GAAP net income was $36.1 million, up 18 percent from $30.6 million a year ago. GAAP earnings per share were 9 cents, up from 7 cents in the same period last year. This was in line with analysts’ estimates.

BEA’s license revenues were up to $118.3 million during the quarter, growing 2 percent from the same period last year. Crucially, this bucked the recent trend in the software industry, in which license revenues have proven a sore point for many vendors (see Software Slump Is Deal Time and Are We out of the Woods Yet?).

During a conference call, Alfred Chuang, BEA’s CEO, predicted that VOIP and Service Oriented Architectures (SOAs) will play an increasingly important role for the company in the future. “We believe that these will be drivers of IT spending over the next few years,” he said.However, BEA has only recently started to ramp up its VOIP strategy. Earlier this year, for example, the company launched its WebLogic SIP Server software, a carrier-grade, J2EE application server to support the SIP protocol for VOIP.

Last night Chuang said that there are “some very large pilots” of the SIP server underway and confirmed that one U.S. telecom provider is now in production with the product. The CEO would not reveal the firm’s identity.

Chuang admitted that, at this stage, BEA's SIP server revenues are “still small,” although he added that the imminent award of 3G licenses in China will help boost BEA’s VOIP ambitions.

BEA, like a number of other vendors, has also been busy adjusting its product lines to support SOAs, which let users run services in the form of application software across different computing environments (see System Vendors Sight SOA).

The San Jose, Calif.-based vendor recently overhauled its Tuxedo middleware and tweaked its AquaLogic product, both with a view to supporting SOAs (see BEA Brushes Tuxedo For SOAs AND BEA Ships AquaLogic Service Bus).Chuang stayed tight-lipped on SOA roadmap specifics last night, although he hinted that the company will look more and more to specialist startups and independent software vendors (ISVs) as it rolls out its strategy. As well as name-checking BEA’s partner and data center startup Azul Systems Inc., Chuang waxed lyrical about how the company clinched 33 “design wins” with ISVs during the quarter.

Despite all the VOIP and SOA shenanigans, Chuang still wants to squeeze more out of BEA’s Americas business, which accounted for 52 percent of the company’s overall revenues. ”I would like to see even more enterprise accounts in the Americas added to the list,” he said.

This morning, BEA shares rose $0.55 (5.91%) to $8.76.

— James Rogers, Site Editor, Next-Gen Data Center Forum

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