The worldwide portal market grew 59 percent in 2001, with new license revenue totaling $709 million, according to Dataquest Inc., a unit of Gartner, Inc. With the market poised for strong growth through 2006, major software vendors are battling to take a leadership position. At this time, there is still no clear market leader. The top three vendors, Plumtree, SAP and IBM, were tied for the No. 1 ranking in 2001 (see Table 1).

"The net result of the IT spending slowdown and the more cautious tone for emerging new software companies made IBM, Sun and SAP a safe bet and helped pull in more portal revenues," said Joanne Correia, vice president for Gartner Dataquest's Software Industry Research group. "The result was that the large software vendors gained market share of new license revenue at the expense of the pure play portal vendors." Plumtree was the only pure play portal vendor to be ranked in the top five of the market. Plumtree's success has been attributed to being early to market, good channel partners and a very strong brand.


Table 1

Worldwide Horizontal Portal Vendors Market
Share Based on New License Revenue
Company 2001 Market Share (%) 2000 Market Share (%) RevenueGrowth (%)
Plumtree 7 5 125
SAP 7 NA NA
IBM 7 3 233
Sun Microsystems 6 7 29
BroadVision 5 NA NA
Others 68 85 26
Total 100.0 100.0 59

NA = Not Applicable
Source: Gartner Dataquest (June 2002)

Gartner Dataquest says the portal product market is at the tail end of the first round of consolidation in which the large software vendors have market momentum. The first two rounds of shakeouts started in early 2001 and should peak by late 2002. The overcrowded nature of a market populated by small, venture-capital- funded, unprofitable companies, exacerbated by the U.S. economic slowdown, started the elimination of over 50 percent of the more than 100 portal software vendors.

"The large independent software vendors (ISVs) embedded portals services into their platforms and have elevated higher-level functionality to premium portal software products. The second round of shakeouts is happening, driven by the actions of the large ISVs, and will take half of the smaller ISVs," said Correia. "The remaining small ISVs will position themselves out of the portal market into vertical industry segments or horizontal functionality, become a niche player, be acquired by other software vendors, or close their doors."

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