23 August 2005 Application server maker BEA Systems is to acquire portal software vendor Plumtree Software for approximately $200 million.

The acquisition is driven largely by strategic importance of portals within a service-oriented architecture. Portals provide a presentation layer, where data from numerous loosely-coupled applications can be displayed.

BEA executives cited Plumtree’s cross platform technology as a major attraction, as it is capable of running in both Java-based J2EE environments, and Microsoft .Net ones.

“The acquisition of the Plumtree portfolio will make BEA the leading provider of the most open, extensible and standards-based J2EE, .Net and service-oriented platform in the industry,” said Alfred Chuang, BEA’s CEO.

But analysts have reacted coolly to the announcement. Plumtree has struggled to gain traction in a competitive market, and analysts are sceptical that the acquisition of the loss-making company will bolster add value to BEA’s business.

“We do not see the addition of Plumtree products to the portfolio as unlocking a new phase of revenue growth for BEA – irrespective of whether the products are integrated into existing BEA products or left as standalone products,” said David Mitchell of analyst group Ovum.

BEA has generated over $1 billion in revenues on the back of its application server software, but has seen its position in that market under threat from IBM and open source application server JBoss.

BEA has also been dogged by rumours of a takeover from Oracle, although executives at BEA have been keen to downplay this possibility.

Plumtree will become part of a new BEA product unit, with BEA’s CTO Mark Carges and Plumtree’s CEO John Kunze leading the transition.