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Bells Tolling for Standalone Portal Plays?

BEA Systems' $200 million bid for software maker Plumtree hardly came as a surprise to analysts, some of whom see the purchase as the tolling of the bell for the standalone portal makers.

Since 1996, Plumtree has been one of the most successful providers of portals, which provide a window view into corporate IT systems -- the final stop after information has been processed by middleware like application servers and back-end database systems.

But for the last few years, the market hasn't been as kind to standalone portal vendors like Plumtree, Hummingbird and Vignette.

In its second quarter, Plumtree posted revenues $20.9 million, down 8.6 percent from the first quarter this year. CEO John Kunze blamed the shortfall on the company's "inability to close a handful of deals by the end of the quarter."

This is because customers' buying trends have tended toward buying complete application suites from vendors like IBM or SAP, said Redmonk analyst James Governor.

"Plumtree was finding itself bidding against SAP and IBM," said Governor. "For people just looking for a portal that wasn't going to fly.

"But many other customers were looking for these end-to-end commitments -- that kind that would choose SAP portal would obviously be very strong SAP shops. From that perspective, it was clear Plumtree was going to have to go somewhere."

The analyst also said he could see JBoss increasingly knocking on the door of Plumtree's customers, making it even more difficult for the San Francisco vendor to compete. JBoss, a provider of open source application server software, is a tough competitor to BEA; it has been successful offering application server and development software free, making its money through support services.

As everyone knows, it's hard to compete with free.

There are silver linings to the purchase. While Plumtree and its staff of 400 employees may have gotten a lifeline, BEA gets to put a polished front door on its impressive lineup of infrastructure software, which includes Java-based application server platforms like WebLogic.

"I think in terms of a service-oriented architecture kind of play, it makes a lot of sense for both vendors. BEA is obviously strong on the back end, but there's got to be a front end to that," Governor said. "They can go to all the Plumtree customers and look to build more integration with back-end services."

The move could also help BEA appeal to Microsoft shops where customers are not entirely sold on Redmond's SharePoint portal, Governor said.

ZapThink analyst Ronald Schmelzer also said the move further solidifies BEA's promise that it would get out from underneath the mantle of Java it has rested under for years as its bread-and-buttter, to a more open, service-oriented approach.

"To be treated a first-class IT provider they must continue to add to their suite of products, building up a platform by virtue of being 'feature complete,'" Schmelzer said. "There are very few companies that can fill the role of consolidator in the IT industry, and it's clear that's the direction BEA is heading."

Schmelzer and Governor agree that well-defined portals are going to be a crucial part of service-oriented architecture (SOA) portfolios, which provide frameworks for Web services to be shared across systems with disparate technologies.

Schmelzer said the evolution to an SOA means that it was only a matter of time before the portal market consolidated with the rest of the integration and service-oriented stack. In a service-oriented world, the role of the portal changes, he explained.

"In an SOA context, a portal is simply a Web-based interface to a composite application that is defined and managed somewhere else - usually in the composite application framework, enterprise service bus , SOA Fabric, Service network, or whatever you want to call it, but definitely not in the portal," Schmelzer said.

Schmelzer said that as companies seek to use their composite applications for mobile applications, rich clients, back-end processes, embedded processes, and Web services, they will look for platforms that loosely couple the interface from the implementation. As such, it is hard to see a future for independent portal companies in the next few years.

"The Plumtree acquisition marks the end of one era - the e-business, Web-based build-out that spawned hundreds of independent software companies - and the beginning of another - the service-oriented, loosely coupled, architecture to solve integration problems era that favors the consolidator of IT over the niche vendor," Schmelzer concluded.



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