There's an interesting article in BusinessWeek by Steve Hamm "Java? It's So Nineties" which posits that LAMP's rise in popularity may be coming at Java's expense. While there are plenty of shops that continue to use Java, especially on the backend, I do think Java, or rather J2EE, is a somewhat specialized technology in the Enterprise. Typically J2EE application servers are deployed on the most highly scaled transactional systems, but not on a lot of the "bread and butter" tactical IT applications that need to be built. Outside of this, Java has had limited success on the desktop and for front end applications.
Peter Yared, CEO of ActiveGrid, has launched his company specifically to help provide additional tools to facilitate scale-out of LAMP based applications, in effect, bringing some of J2EE's horse power into a more mainstream and rapidly growing market. And whether Java is flat or declining, it is certainly the case that the LAMP stack, PHP, Perly and Python are growing like wildfire. My bet is that PHP will be the Visual Basic of the 21st century. It won't always get the respect that the more theoretically "pure" languages get, but it gets the job done and that counts most with the people who use it, just as VB was the language of choice for a much larger pool of developers than used C++. (And believe me, it pains me to say that since I think Delphi was an even better choice!)
When I was in the Java tools and infrastructure space working for M7 (subsequently acquired by BEA), I noticed many corporate customers found J2EE in its full glory to be overly complex. Boatloads of customers used simpler JSP pages, and open source software like Tomcat, Hibernate and other technologies to make Java more practical. I'm not sure if there's a causal relationship between J2EE complexity and the rise of LAMP, but I do see an awful lot of new companies who are building very sophisticated "scale-out" applications on the LAMP stack. There's a whole generation of developers schooled in LAMP who are building phenomenally scalable web sites like Flickr, MySpace, the FaceBook and thousands of others.
From my perspective, I think Java continues to play an important role in the IT world, especially among large organizations that have a history of building custom infrastructure such as in the financial sector and telecommunications industry. At MySQL we don't take a stand on the various platform wars. I don't think there is a single "universal" platform any more than there's a single perfect programming language. I'm equally happy that people deploy MySQL on LAMP, on Java and on .Net. They are all good platforms and each serves its purpose.
A while back I saw ActiveGrid CEO Peter Yared speak at the OSBC conference in Boston and he did an excellent job pitching his company to a skeptical group of Wall Street CIOs. I understand why CIOs can be unwilling to invest in unproven technology. But the LAMP stack has already been proven hundreds of times over in terms of scalability, performance and reliability. And Peter's been on the bleeding edge a few times, and he's seen up front the pros and cons of J2EE. Given Peter's track record, I wouldn't bet against him.