Given recent reports from analyst organizations and articles in trade journals, the future of the enterprise portal market appears rosy. As chairperson for DCI's Portals, Collaboration and Content Management Conference, I find this good news because it means the steady growth I have seen in attendance at the event will continue. To illustrate why the enterprise portal market is successful and to look at how it is evolving, in this column, I'll review some interesting snippets from recent portal reports and articles, and add my own comments as we go along.
To put 2004 into perspective, I thought I would start the discussion by reviewing Plumtree's report, "The Corporate Portal Market in 2003." The executive summary of this report noted that "interest in portal software remains strong." To support this statement, the report quoted a Goldman Sachs IT manager survey that showed portal software as one of the highest priorities for IT spending increases. Of the eleven investment areas considered, only integration software and portal software have increased in priority since the 2002 survey.
The Plumtree report also contained analyst estimates for the size of the portal market. Most analysts expected 20 percent or more growth in portal license revenues. Gartner estimated the portal market will grow at 24 percent to $2 billion by 2006. The equivalent figure from IDC was a 41 percent growth rate to $3.1 billion by 2006.
Moving into 2004, a January InfoWorld article ("The New Enterprise Portal") noted, "The enterprise portal has evolved from vague '90s notions of empowering employees with a document library, to practical, tailored solutions for departments or jobs hobbled by a lack of integration." The article went on to say, "The trick to successful deployment is identifying related business processes, aggregating related applications and data within the portal framework, and establishing individual user identity as the organizing principle -- all while avoiding new coding as much as possible." The writer felt that this "conservative approach may explain why, without much fanfare, portals have kept rolling through the economic downturn."
The InfoWorld article points out that despite improved portal functionality, "portal rollouts have been harder than the simple out-of-the-box dream that portals seemed to sell in the late '90s." Nate Root of Forrester Research thinks this is because the goal has shifted away from knowledge management to portals that "shoulder the heavier burden of aggregating applications that may be scattered all over an organization." Experience at the DCI conference confirms this conclusion. Companies begin by building knowledge management solutions, but as portal projects evolve, these companies begin to bring corporate applications into the portal environment.
A February 2004 article in KMWorld ("Enterprise Portal Adoption Trends in 2003") by Brian McDonough of IDC reported the results of a survey of enterprise portal initiatives. Survey respondents listed reducing the cost of maintaining multiple intranet sites and support of e-business initiatives as the top business reasons for undertaking a portal project. More than 55 percent of respondents stated that the portal was being used internally as a productivity tool for employees, rather than as a tool for partners or customers. However, the report also noted that "as companies solve the problems that spurred their adoption of the portal software, they will later expand the capabilities and functionality delivered through the portal."
An article in the February issue of Intelligent Portals documented the Nucleus Research Report "ROI Comparison Report: Portals." This report compared the ROI of three leading portal products: Plumtree Enterprise Portal, IBM WebSphere Portal and the SAP Enterprise Portal. Customers responding to the survey often chose IBM and SAP because they already had an investment in SAP solutions or IBM WebSphere J2EE technology, whereas Plumtree was selected when the IT group needed to integrate data and services from various sources.
Nucleus analyzed five key areas to quantify the total three-year cost associated with a portal deployment: software, hardware, personnel, consulting and training. Plumtree customers were rated the highest in terms of ROI and in on-time and on-budget deployments, even though the costs of a Plumtree deployment were greater than those for the other two solutions. IBM portal customers also achieved significant returns.
An April article in InformationWeek ("Report Says Most Portal Projects Fail to Deliver Enterprise Benefits") reinforces the need to tie portal projects to specific business processes. The report by Forrester Research cited an "IT-centric portal mindset" and "weak alignment with business goals, soft budget justification, and too many choices" as being behind many project problems. The report also noted, however, that "portals rank high for many in the enterprise." Thirty-four percent of IT decision-makers named portals second to security as the technology they expected to purchase in 2004. The survey also found that 88 percent of portals serve employees rather than customers.
In March, Line56 E-Business News reported Gartner's latest rankings for "horizontal" portal providers. In the leaders quadrant were IBM, BEA, SAP, Oracle, PeopleSoft, Sun, Plumtree and Vignette. Challengers were Microsoft, Novell, Fujitsu and Computer Associates. Visionaries included BroadVision, Hummingbird, Sybase and Open Text, and niche players were webMethods, Tibco, SeeBeyond, ATG, Day and abaXX.
Tying these pieces together, we can see two key trends. The first is that portal is a hot technology that is evolving from supporting knowledge management to the more complex world of providing a single interface to enterprise-wide content including corporate applications. The second is that as portal projects become more complex, care is required when developing the business case and in selecting products. To find out more about these topics, join me at the December DCI Portals, Collaboration and Content Management conference in Orlando.
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