Database kingpin Oracle expects to overtake market leaders IBM and BEA Systems in the highly lucrative application server software arena next year. Thomas Kurian, Oracle's vice-president for its application server business, said this market shake-out would follow the consolidation that had started in this segment of the global software industry. 'We have set out to be No 1 in this space, too,' he said, adding that Oracle 9i application server, which was released in June, 'is already the fastest-growing product line at Oracle, ahead of even our database software and other enterprise applications'. Oracle's ambition to be the world's leading vendor of application server software will require a huge leap in demand for its product, based on recent market estimates. A study by Gartner's Dataquest unit showed BEA's WebLogic held a 41 per cent share of all new direct-licence revenue in the application server software market last year. Its closest competitors were IBM's WebSphere, with a 31 per cent share, Sun Microsystems' iPlanet, with 13 per cent; and Oracle 9i application server, with 4 per cent. Oracle, the world's leading supplier of database software used to collect and manage network data, only formally entered the application server mark last November after years of product development. An application server runs in an organisation's distributed network computing environment to provide the business logic for an application. It is the middleman residing on an intranet server that helps a user's business applications run between the Web browser-based front-end, usually at a personal computer or workstation, and the system back-end, made up of database and transaction server programs. International Data Corp (IDC) said the worldwide market for application server software grew 128 per cent last year to almost US$2.2 billion from about US$957 million the previous year. Strong growth was expected to continue until 2005. Mr Kurian said this market move towards consolidation favoured Oracle to be the last application server vendor standing when the dust cleared next year 'Certain vendors have already started to bundle their basic application server product with a number of operating systems,' he said. Early this month, Hewlett-Packard (HP) began offering version 8.0 of its Netaction application server as a free download for several operating systems and planned to bundle it with the HP-UX platform. According to Gartner, Microsoft already bundles its proprietary .NET framework with Windows, Sun its iPlanet with the Solaris platform and IBM its WebSphere with iServer. Gartner expected the HP move to force independent application server vendors to look for new platform partnerships and means of differentiation. Gartner also predicted that basic application server programs would be mostly available embedded in operating systems by 2004. Mr Kurian said the Oracle 9i application server need not follow suit because it worked with all operating systems, which made it easier to install and allowed for lower total cost of ownership compared with leading rival products. Gartner recently estimated companies worldwide could have overspent about US$1 billion on application server technology since 1998. An additional US$2 billion might be wasted between now and 2003. Mr Kurian also stressed Oracle was 'ahead of the curve' in enhancing its application server with value-added programs that were scalable, from small to large organisations, and backed next-generation applications such as high-speed, multimedia wireless data transmission. Steve Garone, IDC's vice-president for enterprise integration software, said: 'Survival in the application server software platform market requires more than just these products. Vendors need to provide an e-business platform that includes all functions necessary to build and deploy e-business applications, leveraging the application server software as the foundation layer.' Mr Kurian said Oracle 9i application server offered load balancing, clustering and deployment features which allowed information technology system administrators to easily manage and maintain a Web infrastructure distributed across multiple servers worldwide. It is the only application server tightly integrated with the Oracle database that offers built-in caching, enterprise portal software and business intelligence features.