In a little more than a decade, BEA Systems built itself into a top middleware player and one of the leading lights in SOA. That’s a good thing. Revenues at BEA are soaring (up 19 percent in the latest quarter) and the company’s stock price rose around 50 percent in the last year. But playing in a hot space such as SOA is a classic instance of having the tiger by its tail. As CEO Alfred Chuang told InfoWorld Executive Editor at Large Eric Knorr in a recent interview, the company still needs to move aggressively to avoid being left high and dry by rapid shifts in the technology landscape.

InfoWorld: What do you think is the future of enterprise software and where does BEA fits into it?

Alfred Chuang: You will have vendors like us that will be selling platforms (and) application vendors that will be selling application components, yet they will be assembled on the fly by an end-user. End-users will be using a tool -- or they will be using templates or processes -- that will represent what their environment is. They can always go back to change the process on the fly, yet the components will continue to be usable within those processes.

One big advantage: You’ll be able to upgrade component functionality without affecting the process itself. Today, this is a total mess.

IW: Where do you think SaaS (software as a service) will fit in to this vision?

AC: Like when you rent a car, you don’t really care much about your car. When people drive a rent-a-car, they drive very differently from when they drive their own car. You see the craziest man driving around the hills of San Francisco in a Ford Taurus -- it’s likely to be me -- and I’m killing the brakes coming down the streets of San Francisco, flying over the hills, because I don’t give a crap. Now, if it’s my own car that I’m driving, it’s very different. I’ll be parking at the corner parking station and making sure nobody can possibly ding me.

There will be people who want full flexibility, so all they want is a rental car. There are people who will want ownership so badly ... that they will buy the software. SaaS will be able to attract small groups in large corporations, or small organizations, period. I think a successful company, including ourselves, even at the middleware layer, will have to offer both to people.

IW: So you’re not ruling out offering some of what BEA offers now as a service?

AC: Not only am I not ruling it out, we have to do it.  I’m saying it’s not going to be 100 percent of the world.

IW: What about the effect of the open source model?

AC: Open source is the ultimate tool to keep us honest, especially on pricing. Linux is a good example. I spent the first half of my career from the very beginning of Sun until they were several billion dollars in size. For the longest time, Solaris was the reason people would buy a very, very expensive box. All of a sudden, people did not notice -- especially the people at Sun -- that the API was no longer dependent on Solaris. We’re not calling any of the functions directly on the operating system anymore. They are programming that to things like J2EE. So overnight, what happened is someone came up with a computer running an operating system that J2EE can run on. Literally, there’s no porting, there’s no changing, nothing. In fact, the same application is being extended by buying more CPUs running Linux. Linux totally commoditized Unix in the marketplace. Open source serves [another] very important purpose, I think, which is education. SOA [service-oriented architecture] is lifting us to a different level. Look at the application server or integration software. You really want to educate developers? Let them tinker with what’s inside so they fully understand what they’re dealing with.

A smart vendor will always watch whether their software is being commoditized. And it’s not wrong to be commoditized as long as your volume catches up with it. You must continue to innovate in abstractions at higher and higher levels.

The demand is unlimited at this point in time. Look at our appetite for Internet applications. It is absolutely insatiable. We want more and more and more. I want to do everything on the Internet. If I’m booking an airline ticket -- I just came back from Asia last night -- I did the whole thing in my car on my 3G BlackBerry.