BUSINESSWEEK ONLINE : DECEMBER 11, 2000 ISSUE
BUSINESS WEEK E.BIZ -- COVER STORY A Hill of Beans That Could Have Buried BroadVision The software upstart learned just in time that being slow to embrace a hot new Net standard, like Enterprise Java Beans, can be costly BroadVision CEO Pehong Chen still bristles at the memory. On July 6, e-commerce software rival Art Technology Group Inc. announced that it had poached one of BroadVision's blue-chip customers, American Airlines. The reason: BroadVision was slow to embrace Enterprise Java Beans, a new kind of software programming. ATG, on the other hand, was considered an EJB pioneer -- an innovator that could help American Airlines stay ahead of the e-business curve. American execs planned to tear out their finished BroadVision e-business system in favor of the new ATG software. (American would not comment for this story.) The fallout was immediate. Wall Street watchers dropped loaded phrases like "potential softness in future sales" into their BroadVision reports. Would big companies buy software perceived to be lagging technically? The question was enough to panic antsy investors. Though BroadVision was profitable and growing at 300% annually, its market cap was cut to a third of its June value before the stock bottomed out at $17.62 in September. "That was a knee-jerk reaction," Chen says defensively. "Deals are won and lost every day in our business." BUILDING BLOCKS. But the American debacle proved to be more than a lost deal -- it was a wake-up call that forced Chen to rethink BroadVision's programming. Today, Net business systems rely on so many different brands of software that it's imperative vendors assemble their software with the same programming building blocks -- called standards -- to ensure consistency. Without using such standards, Net business builders can face serious and expensive headaches. "Programming standards just make life easier," says Bob Renner, chief technology officer at Forest Express, a paper-product consortium based in Atlanta. That's why standards with techno-gibberish names like Enterprise Java Beans, extensible markup language (XML), lightweight directory access protocol (LDAP,) and open database connectivity (ODBC) have become so important. They're the alphabet soup that makes the Net work. Using these common methods makes it easier to split giant e-business software systems into more manageable components that work together. And if software companies don't work with the same building blocks, "We could all miss the unbelievable opportunity to really improve the life of companies," says SAP co-Chair and CEO Hasso Plattner. Programming standards have also become a good litmus test for future success in the Net software market. If a company doesn't support them, investors and potential customers will brutally write the company off. BroadVision found that out the hard way. "It becomes very difficult to change their perceptions," says Chen. Building all business software with the same blocks wasn't always so important. But then came the Net and its endless potential for making online connections. Among the first Web programming standards to come along was Java, a technology leftover from failed efforts to create interactive television in the early 1990s. Sun Microsystems Inc. reintroduced Java in 1995 as the ideal programming language for the fledgling Web. EASILY PAIRED. But Java didn't really catch on until 1998, with the introduction of Enterprise Java Beans -- little globs of code that, when strung together, can match even the most complex business software. They've quickly become the preferred method for creating big e-business systems. Beans from competitors' software systems can also fit and work together, like identical bricks from different construction sites. Oracle financial software, for example, can be more easily paired with ATG customer-management software. Beans have another big advantage. A company can work with individual Beans instead of installing and upgrading one giant piece of software, thus avoiding the expensive hassle of big upgrades. Want to change the way you handle order forms in your business-to-business software? Just pluck out the order-form Bean and upgrade it. Beans also save time. By working with EJBs, a company can cut its software development time by nearly 90%, say some experts. "It's the only way to keep up with the pace of Internet development today," says Ari Kahn, chief technology officer at Fatwire Corp. How important has Java become? Plenty, if the interest of industry heavyweights is any indication. IBM is an aggressive backer, as is Oracle. And Hewlett-Packard Co. execs didn't bat an eye on Oct. 24, when they struck a $470 million deal to buy Bluestone Software Inc., which is known for its EJB-savvy. "If a company can't even say they're headed in an EJB direction, then I'm going to have a problem with working with them," says Francis Dramis, chief information officer at Bell South. APPLAUSE ON THE STREET. If EJBs are the Net's building blocks, extensible markup language, which was created at about the same time, is the mortar between them. XML is a Net-specific data-sharing technology that allows software programs to talk with each other. Commerce One Inc., for example, uses XML to tie the computer systems of suppliers into its giant e-marketplaces. Microsoft Corp., which has rejected Java because it has its own competing technology, is a big XML fan. So is just about every software company in the country. After the lost American deal, it became clear to Chen that he had to make a bold move. On Nov. 15, he did just that, by announcing that BroadVision, which was founded in 1993, before the development of the crucial Web tools, would tie its own e-commerce system to software from BEA Systems Inc. The companies, sometimes rivals, also agreed to link future development and resell each other's software. It was a smart move. Like ATG, BEA is considered a pioneer with Java programming language and, in fact, is the largest maker of Java-based software, according to International Data Corp. In one stroke, Chen sided with so-called Java experts and got the Java lovers off his back. The new BEA/BroadVision combo will start shipping early next year. Some could say the BEA deal is an admission that BroadVision was way behind in the race to embrace standards. Indeed, it surprises many that BroadVision will be working so closely with a sometime competitor. But Wall Street observers applaud Chen for swallowing his pride and cutting the deal. "Now BroadVision can say they are just as Java-compliant as anyone else," says Greg Vogel, an analyst at Banc of America Securities. And that's a great thing. At least, until the next hot Net building block comes along. Jim Kerstetter in San Mateo, Calif. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					e.biz Contents for Dec. 11, 2000 issue RELATED ITEMS The New Software Whizzes TABLE: Software's Brash Upstarts CHART: The Upstarts Are Growing Fast...Boosting Their Stock Performance... TABLE: ...And Winning Buy Recommendations GRAPHIC: i2 Technologies Snapshot GRAPHIC: Vignette Snapshot GRAPHIC: BEA Systems Snapshot GRAPHIC: Ariba Snapshot GRAPHIC: BroadVision Snapshot Microsoft's Little Bro' TABLE: Still King of the Hill ONLINE ORIGINAL: A Hill of Beans That Could Have Buried BroadVision ONLINE ORIGINAL: How E.piphany Gets Them to See the Light ONLINE ORIGINAL: Q&A with BEA's William Coleman ONLINE ORIGINAL: Q&A with Commerce One's Mark Hoffman INTERACT E-Mail to Business Week Online

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