The seven-year-old Internet company pioneered software that corporations use to build run-the-business Web applications. Now it faces challenges on all sides.ONE-PRODUCT COMPANY

Two years ago, BEA's flagship WebLogic application server accounted for 70% of total software revenues. Now BEA (BEAS

) is diversifying into new markets such as security and corporate Web portals.ENDANGERED MARKET LEADERSHIP

Analysts project IBM will become the market share leader this year, with 31% to BEA's 26%. To head that off, BEA released an upgrade of its application server that analysts say keeps it out front.SHORTAGE OF PARTNERSHIPS

Early on, BEA didn't pursue partnerships with large tech companies. That's changing. Its software now comes bundled with applications from enterprise software players PeopleSoft and Manugistics.CAN BEA SYSTEMS GROW UP?

The seven-year-old Internet company pioneered software that corporations use to build run-the-business Web applications. Now it faces challenges on all sides.ONE-PRODUCT COMPANY

Two years ago, BEA's flagship WebLogic application server accounted for 70% of total software revenues. Now BEA is diversifying into new markets such as security and corporate Web portals.ENDANGERED MARKET LEADERSHIP

Analysts project IBM will become the market share leader this year, with 31% to BEA's 26%. To head that off, BEA released an upgrade of its application server that analysts say keeps its technology out front.SHORTAGE OF PARTNERSHIPS

Early on, BEA didn't pursue partnerships with large tech companies. That's changing. Its software now comes bundled with applications from enterprise software players PeopleSoft and Manugistics.