VOLUME 2 | ISSUE 23 | JUNE 11, 2001  
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06/08/01
Juniper Gets Pinched
06/07/01
Oracle's Ellison Presents at JavaOne; Brighter Days Ahead
SuperComm 2001 Highlights
Global Crossing Starts Year with Solid Quarter
06/06/01
Global Crossing: Company Report
Siebel Jockeying to Capture More Government Spending
Integrating the Infrastructure
06/05/01
Webmethods: Company Report
Amazon Sticks by Its Guns


Seismic Shift

By Mark Verbeck
Managing Director, Senior Analyst

Mark Verbeck
Mark
Verbeck


"We believe that J2EE is becoming the 'right' architecture that customers will want their commercial applications to support."

Not far from the San Andreas fault, 15,000 Java enthusiasts and hundreds of corporate sponsors gathered for the JavaOne conference, Sun's worldwide forum for Java developers.

While Sun executives (including Bill Joy, the company's visionary chief scientist) delivered the majority of the keynotes, Pekka Ala-Pietilš, President of Nokia Corporation, William Coleman, Founder, Chairman, and CEO of BEA Systems and Larry Ellison, Chairman and Chief Executive Officer of Oracle also spoke at the San Francisco confab.

These high-profile presenters are a testament to the importance of Java. We believe that the support for Java and advances in the standards, particularly Java 2 Enterprise Edition (J2EE) place the enterprise software industry on the brink of important changes. The final J2EE 1.3 specification which includes internal support for XML along with several other new features is expected to be available in the third quarter of this year although beta versions are already being used. J2EE lifts Java standards to meet the requirements of commercial business applications. Indeed, early movers such as MatrixOne already have a robust J2EE-compliant application and more are hopping on board every day.

An Internet architecture implies much more than a Web interface. The real benefits are transparent to users and include features such as high scalability thanks to multi-tiered server architecture, portability across various hardware platforms, heavy duty security, and easy integration.

What does this mean for the enterprise software industry? We believe that J2EE is becoming the "right" architecture that customers will want their commercial applications to support. Customers will appreciate the benefits of having a common architecture across various applications and, unlike previous generations such as client server or proprietary architectures, the standards-based J2EE promises a high level of compatibility.

We also believe the J2EE movement will have another interesting impact on the industry. Because J2EE is a standards-based, object-oriented development environment, the integration of applications for different vendors is much simpler than it was even with C++. We believe that this may well fuel merger and acquisition activity as companies realize that the integration issues that acquisitions once raised diminish if both parties have adopted J2EE. Indeed, Manugistics said Talus' J2EE architecture would speed its product integration. Since integration costs are factored into the price of an acquisition, we expect companies with a J2EE architecture to be valued at a premium.

Companies mentioned in this note: BEA (Nasdaq: BEAS, $37.88), Nokia (NYSE: NOK, $29.83), Oracle (Nasdaq: ORCL, $17.01), Sun (Nasdaq: SUNW, $17.01)

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