Companies are opening their wallets to portal software because it can improve employee productivity and, in the long run, cut costs, analysts and technology buyers said. As an added bonus, increased competition among software makers has spurred a price war that could uncover some bargains for buyers.
Unlike most business application software, which tends to add complexity to internal computing infrastructures, portal software is designed to simplify. The software lets companies create Web pages, or portals, for their employees, customers or business partners. The benefit? One-stop access through a single Web page to vital information stored in a mishmash of dissimilar e-mail programs, human resources systems and sales databases.
"It's the age-old quest for one piece of software (to bring) everything together to keep everyone happy," said Simon Hayward, a vice president and research director at Gartner. "It's the grand unification of all the different applications in your organization."
A study released on Monday shows that the worldwide market for portal software grew 59 percent in 2001, with new license revenue totaling US$709 million, according to Dataquest, a unit of research firm Gartner. Compare that trend with spending on enterprise software overall, which grew only 4.3 percent last year, according to banking group ABN AMRO.
And despite an expected 14 percent decline in technology spending this year, more than one-third of the 3,500 largest corporations plan to buy portal server software in 2002, according to a survey by Forrester Research.
Profit-starved software makers, sensing a rare buying spree among customers, aren't wasting time in flooding the market with new products. Smaller companies, such as Plumtree Software and Epicentric, have historically concentrated on portal software. Now bigger players like Microsoft, IBM, Oracle, SAP and Sun Microsystems are setting their sights on the market.
Sun last week announced plans for a new Sun ONE Portal Server that will run on top of BEA and IBM's application servers, as well as its own application server. Sun also recently announced a deal with Yahoo to allow access to popular Yahoo content through Sun's portal software.
Microsoft last month announced it would revamp its SharePoint Portal Server next year, allowing non-technical employees to build corporate portals on their own without the help of software developers.
Portals can't solve all integration problems. Issues like single sign-on user authentication still need to be ironed out. And standards for portal development are still shifting.
But portal software can cut down on the constant "screen swapping" that most business users experience in their daily jobs, leading to more efficient workers. For internal developers and tech support people, portal software creates an easy-to-troubleshoot single point of access.
"The biggest benefit of a portal server is a central point of control in security and access and a common look and feel that looks like the front of Yahoo," said Larry Podmolik, chief technology officer of consulting firm LeapNet in Chicago.
