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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