To do business on the Web, you need an application server. Too bad you’re probably paying too much for it.

In e-business, an application server is the functional equivalent of the guy who stands on a shipping dock loading and unloading boxes all day long. It’s not a glamorous job, but it is totally essential to many businesses. No shipping dock means no product deliveries, no supply chain — in short, no bricks-and-mortar business.

Now imagine that you’re paying that loading dock employee half a million dollars a year — 10 times the going wage. Sound crazy? That’s the scenario that’s playing out in the application server world, according to a recent report by Gartner Inc., a research and consulting company in Stamford, Conn.

Application servers do the heavy lifting of e-business. They provide the essential services the Web applications need, such as managing transactions, keeping track of customers as they browse through your website, and connecting to the databases at the heart of your company. Using application servers, your techies (or hired consultants) can integrate customer and product data with webpages. The result: Web applications — the programs that do functional things on your site, such as validating credit card numbers, managing customer shopping carts, or delivering personalized webpages to site visitors.

In theory you could build an e-business website without using an application server, but it would be pretty hard going — sort of like trying to build a house by chopping down trees, milling your own lumber, and forging your own steel tools. It’s much easier and faster, and usually cheaper, to build your website using the prefabricated tools that application servers provide.

The problem, according to Gartner, is that companies are grossly overpaying for high-end Web application servers that cost $100,000 and up, such as IBM’s WebSphere (IBM) and BEA’s WebLogic (BEAS), when they could make do with cheaper, midrange servers that cost a 10th as much — in the neighborhood of $10,000. In all, Gartner estimates that companies have overpaid by $1 billion since 1998, about 25 percent of the total expenditure for application servers since that year.

Gartner VP for Internet research David Smith told me that many companies are simply confused about what kinds of application servers they need — and how to build their websites accordingly. “Even though companies may have a legitimate need for high-end application servers, that doesn’t mean their entire infrastructure needs it,” he says.

The top-tier application servers include features that might be needed in some parts of your Web infrastructure, but don’t need to be built into every single server. For example, high-end application servers usually include support for Enterprise JavaBeans (a Java standard that facilitates communication between different computer systems). According to Smith, only 20 percent of Web application servers actually make use of EJB, though many more include — unused — the capability to do so.

Instead, Smith recommends that you install such high-end features only where they are needed — at the point where your website communicates with the rest of your company’s IT architecture, such as your central databases (known as the “back end” in IT parlance). Use cheaper application servers elsewhere on your site. When those cheaper servers need access to the back end, they can use the high-end servers as intermediaries.

IBM and BEA both offer cheaper versions of their Web application servers. Application servers are also built into so-called integrated development environments, such as SilverStream (SSSW) and Macromedia’s Jrun (MACR), which include the tools for developing Web applications as well as the servers for deploying them. And, finally, there’s Microsoft, which has built application server capabilities into Windows 2000. Any of these servers would be well-suited for those places in your architecture where you don’t need a full-fledged high-end server. The key is not to reflexively buy the top-tier application servers, and instead cast a closer eye on your website’s architecture and operating budget.

Link: Are You Overspending on That App Server?

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