Few technologies have had to live up to the hype that surrounded the introduction of Java, Sun Microsystems Inc.'s Internet-friendly programming language.

Two years later, Java is more than holding its own. More companies consider it their language of choice.

Of 50 Fortune 1,000 information technology executives surveyed by Forrester Research, 48% said Java would be critical or important to their software development strategies in 2000, up from 18% in 1998. (Eight of those surveyed came from financial institutions.)

Java has helped overcome time-to-market problems. Product rollouts can take two or three months, instead of two or three years, and a wider range of more flexible services make their way to end customers.

"Our users are looking at the world in a very different way," said Gail Smith, senior vice president at Bank of Nova Scotia, Toronto. "This is the most powerful technology we've seen."

Java initially attracted so much attention because applications created with it could be run on any operating system, a revolutionary concept in the proprietary world of computing. Its attributes were trumpeted in the popular and trade press alike.

Sun Microsystems originally billed Java rather humbly as a language for building single-function applications to solve simple problems. For example, it could be used for software that would let tellers request information via "network computers"-cheaper, simpler, "thin client" versions of the typical personal computer. It was thought that loan officers would still need PCs to originate mortgages.

"The original thinking about Java was that it left a very small footprint on the device, and so network computers were a good way to use it, but limited," said Colette Coad, a partner at Ernst & Young.

Today, Java users have higher aspirations. "Now the thinking is about ways to scale it up to be enterprisewide," said Ms. Coad.

"The technology has made incredible strides," she said, thanks to subsets of code and extensions, known as application programming interfaces, that have been built by other companies. These developments let Java be easily connected to other software packages and operating systems, making it more functional.

At a recent count, Sun had 62 software company partners, mostly in financial services, building applications with Java, said Jim Bressler, Sun's global industry manager for banking.

Java is also gaining ground in bank development shops. The advanced technology group at PNC Bank now uses Java almost exclusively.

"The only reason we don't is if it's a mainframe application," which requires Cobol programming, said Eric Meredith, manager of advanced technology. A year ago, the bank was more likely to purchase software from vendors, rather than try to build it, he said.

Java fulfills two major goals PNC had: to be able to create code that could run on any operating system and to build code that could be reused. "Java gave us a means to an end," said Mr. Meredith.

For example, PNC is using a Java program to accept car-loan applications from a major business partner, the Automobile Association of America. PNC can accept applications and process them automatically, no matter what operating system is in use at the offices.

"The day when you have control over (end-user) desktops is gone," said Mr. Meredith. Java solves issues that arise when "you have no idea what operating system" end users are going to be running, "but you have a mission-critical application you want to give them."

He added that the ability to re-use Java code would let the bank bring software-based products and services to market more quickly. "If you develop a re-use strategy, then your time to market decreases substantially and your costs go down," said Mr. Meredith.

Bank of Nova Scotia now has 80% of the software developers in its capital markets group using Java to build computer programs. Its commitment began about two years ago as a small effort to write a simple program that would automate data entry into its mutual fund processing system.

"We found Java so compelling that we found other projects" for it, said Ms. Smith. Now, the bank is using Java to rebuild the front end of its derivatives processing system.

"We went from using Java in our simplest application to our most complex," she said.

Now the bank is using Java to centralize its capital markets operations. "Java allows access from different places around the world. You don't have to be at your desk."

Ms. Smith also anticipates building applications that would help the bank's customers better understand their positions. Java would smooth the process of deploying such software to a variety of computing platforms.

"Java is about different ways of doing things," said Ms. Smith.

Java's utility is extending beyond bridging disparate networks of people using PCs or "clients." It is becoming viable for robust applications that run on high-powered servers inside an organization.

"If you pigeonhole Java as a computing language only for things going out over the Internet, you miss a lot of it," said Mr. Meredith.

Sun Microsystems itself almost missed this.

"I think it surprised Sun when the server side came on," said Michael Durbin, president at Open Business Systems, a Wood Dale, Ill.-based subsidiary of the systems integrator Osage Systems Group Inc. Open Business has a facility dedicated to building customized Java applications for its clients, many of them banks.

Yuval Lirov, senior vice president at Lehman Brothers, New York, said, "The main claims for Java have centered on its cross-platform capabilities at the front end. But it turns out Java is equally, if not more, effective at the middleware and server level."

Lehman Brothers is using Java in a number of development efforts, including the creation of a portfolio management system that would let clients analyze their holdings against Lehman benchmarks.

Detractors of Java cite such shortcomings as its immaturity, slowness, and a lack of standards that complicate its use on PCs with different graphical user interfaces.

"These are all valid issues," said Mr. Durbin. "But that's not seeing the big picture. The benefit for the business over all is so significant."

Open Business Systems builds 99% of applications for its customers with Java, up from about 60% two years ago. "We've run out of reasons not to use it," said Mr. Durbin.

Microsoft's alternative to Java, Active-X, is also gaining ground. Some users say it is more powerful within Microsoft's Windows environment.

Quote.com of Mountain View, Calif., said it uses both Java and Active-X to deliver real-time stock prices over the Internet and can give users additional functionality with Active-X.

For example, Java lets Quote.com deliver an e-mail-like message at the end of the day that shows an aggregate change in a portfolio of stocks. With Active-X and Windows, Quote.com can show aggregate changes in real time.

A drawback of Active-X, observers say, is that it must be used with Windows. Thus its interoperability is "at a substandard level," said Ms. Smith. "Our choices for standards are industrywide."

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