The shrinking Java tools market

BEA, CodeGear acquisitions reduce developer options as the money disappears

The Java tools market is in flux, with the recent acquisitions of CodeGear and BEA Systems altering the landscape, leaving developers with fewer independent tools choices.

Oracle bought BEA Systems for $8.5 billion. Meanwhile, CodeGear, which had been on the market for more than 18 months, finally was bought by Embarcadero for $23 million, a figure much lower than a reported original asking price of $150 million. CodeGear's offerings now will be paired with Embarcadero's database development tools. Compounding the clouded scene is Compuware's decision to discontinue its OptimalJ Java development environment.

BEA's acquisition raises questions about the BEA Workshop Java toolset. "I know that they're going to certainly sustain the product, but I don't really have any visibility into any improvements that they're going to make," said Bill Roth, a former BEA unit executive in the Workshop products group. (Oracle declined to speak on the issue.)

Roth gave a thumbs-up to Embarcadero's CodeGear buy. "I actually like what Embarcadero is doing, and I'm really pleased to see how they're taking in and adapting CodeGear. I think it's a great move," said Roth. Embarcadero is merging best-of-breed database tools and coding tools, he said.

Fewer vendors, fewer choices
"We're definitely seeing a consolidation," said Maher Masri, president of Genuitec, which offers the MyEclipse IDE, a Java tool based on the open source Eclipse platform.

IBM, Oracle, Genuitec, and CodeGear now account for 95 percent of the commercial tools market in the Java space, Masri said. But Oracle and IBM have entire infrastructure stacks, so developers risk vendor lock-in with these choices, he said. "The flexibility of being able to move in and out of one-vendor-provided solutions is becoming less and less possible."

IBM Rational's Ashok Reddy, director of offering management, did acknowledge that IBM tools are optimized to work with IBM software. But he said that developers can use tools such as the Rational Software Architect and Jazz platform with other platforms. "They'll work with almost anything out there," he said.

The exact impact of the CodeGear acquisition, meanwhile, remains to be seen. "It's not quite clear in terms of what direction they're going," Masri said. Embarcadero could end up offering a technology stack like other companies, he said.

The CodeGear acquisition "is about creating an empire of tools," said Greg Keller, vice president of product management. He sees the consolidation of tools into fewer vendors as a positive thing:

"If you use IDEs like [CodeGear's] JBuilder or Eclipse, we now can offer the developer an integrated set of tools to ensure their productivity from the Java code straight through to the relational database code," Keller said.

Java consolidation not a new trend
Consolidation in the Java tools market already happened quite some time ago, said analyst Michael Cote of RedMonk. "Essentially, you have Eclipse, NetBeans and Visual Studio, and the JetBrains people," he said, noting that many commercial tools now are based on Eclipse.

The rise of open source Java tools -- notably Eclipse -- in fact promoted the consolidation of the Java tools market, Cote said, spurring Borland's decision to exit the tools market and form CodeGear as a subsidiary before finally selling it off. The Eclipse platform and its free tooling became such a potent force that companies such as BEA began to base their own tooling on it, rather than invest in proprietary ones, he said.

The acquisitions of BEA and CodeGear, Roth said, were "necessary outcomes of a shrinking market." The Java tools market is shrinking in terms of dollars "because there's so many free good free options out there for most of the kinds of simple Java development that people need," he said. Workshop was priced at $999 with plug-ins, he said. By contrast, Eclipse and Sun's NetBeans products are free. "It's really hard to compete with free," he said.

But Eclipse executive director Mike Milinkovich said he does not believe Eclipse has reduced the Java tools market's size, though he agrees that it has reduced the total number of tools. "More and more companies are collaborating on the evolution of the Eclipse platform and then using that platform in their products," he said.

For Sun, app dev is now a loss leader
The economics of free caused Sun to rethink its whole approach to Java app dev tools. Last year, it merged its formerly commercial Sun Java Studio Creator and Sun Java Studio Enterprise tools into the free NetBeans. The reason: Sun saw the tools market no longer made sense as a business if the goal was to make money from selling software licenses to developers.

So now Sun sees the tools as a way to encourage the use of Sun's other revenue-generating services and platforms, such as application servers, said Kuldip Oberoi, group manager for developer tools marketing. "Developer tools become an enablement" to monetizing the application server, he said.