Enterprise portals: The expert predictions

Simon Marshall speaks to three leading analysts about future enterprise portal developments and why the market is set to do well.

The impression you get from speaking to analysts about the future of the enterprise portal market is one of ambivalence.

On one hand, the market has the willpower - driven by CIOs, IT managers and even the board - to outperform nearly every other enterprise investment area. Indeed in some places such as the public sector, the financial industry and manufacturing it even has the budgetary stamina.

Enterprises worldwide are believed to esteem implementing portals as a number two spending priority topped only by security. However, on the other hand, it is its nebulous, flux-like nature that may well see enterprise portal implementation trundle along unspectacularly for years when there are real commercial benefits to be had. Here's an illustration.

"In our recent survey, enterprise portals are at the top of knowledge management initiatives," says Nikos Drakos, research director at Gartner. "There is a whole spectrum of places where enterprises expect to get value out of [implementing] portals."

And yet.

"The market could go in the direction of enterprise portals becoming the de facto standard or it could founder," says Laura Ramos, an analyst at Forrester Research in the US. "De facto is a strong word… the benefits are there but they're not as tangible as you'd expect."

When these two apparently dissenting points are looked at more closely, however, a clearer picture begins to emerge, where implementation is in its earliest stages and early adopters have already begun to integrate applications http://www.silicon.com/research/specialreports/portals/0,3800002620,39119806,00.htm . However, leaving the justification issues aside for a moment, there may be a serious technical stalling point that enterprises must surmount.

"Web access is a very hot area but the user interface is still not compatible with the Win32 interface or Unix or Linux, and so there's a question about whether we need a richer client," says Ramos. "Application integration is hard because of all the graphical user interface work and if apps are not ready to run in a browser, you're going to be limited in what you can do."

Forrester itself sees the market as a steady grower, with application integration at about a 4 to 6 per cent growth in 2004, and portals at about 10 per cent. It reckons the enterprise portal market is a $1bn business but doesn't see it extending beyond the $3bn or even $2bn stage within the next three years.

Gartner broadly agrees with these figures and adds that the indicative geographical split of spending is 60 per cent North America, 24 per cent Western Europe, with Asia Pacific, Eastern Europe and minority implementations making up the rest. Drakos admits that this perspective is muddied slightly by the unaccountable number of homegrown implementations in Eastern and Southern Europe and by the use of open source technology, particularly in France and Germany.

"The market can be tough to gauge," agrees Tony Hart, senior analyst at Datamonitor. "That's because sometimes enterprise portal software is a freebie that provides a lock-in for some of the vendors."

He seems to agree, too, that the market is characterised by apparent contradiction.

"I think the portal market is really bi-polar because the technology behind it is not fully mature but the vendors in the market are [themselves] mature companies," he explains.

Where the vendors have missed out, he says, is in including the ability to integrate applications within their portal software. In other words, 'If it don't plug easily into a database or a SAP system, for example, then it ain't cutting the mustard' since that's where the attention of enterprises is focused at the moment.

According to Forrester's Ramos, the vendors are responding to this demand, especially the larger companies such as BEA, IBM and Oracle, who are now offering platforms that allow greater application development.

"If an enterprise can spend less time assembling the [application integration] pieces then they can allocate more time to getting people to use them," she says. This is a bigger issue than it sounds because quite often enterprises are implementing portals that have low subsequent usage rates or, in fact, they don’t appear to know why they were implemented at all.

"Enterprises always have problems with answering the question, 'And do what?' when talking about integrating applications."

Figures from a survey of Forrester clients seem to bear out this general stance, with about 25 per cent of respondent companies admitting they had no idea how much they were spending on their portal implementation project. Sixty per cent said they feel a spending increase would be necessary going forward but, by way of a silver lining, over 50 per cent said they are getting benefits at a level they expected or above.

Currently, there are between 10,000 and 20,000 enterprises worldwide that have deployed enterprise portals, which makes it a very young market. One factor that may keep it immature is a lack of understanding, or ability, to deploy a portal across an entire organisation in order to achieve maximum benefits.

"The deployment of technology for aggregating information sources and delivering them to audiences is happening," says Gartner's Drakos. "Awareness of this need is there but what's not happening is a consistent approach to deploying across the organisation."

Although implementing portal projects on a small, departmental basis may yield great initial results, he warns that some organisations get mired at this stage and never make it past first base.

One important factor that could provide the additional fuel to jet enterprises off this slippery slope is the anticipated increase in spending on just this type of project.

"We're now a quarter of the way through 2004 and many companies are having to upgrade the investment that they sunk into Y2K projects three-and-a-bit years ago," says Tony Hart. "That's going to be an interesting thing to look out for."

Another positive future factor - perhaps the most important - is that enterprises have the determination to implement portal projects and the purpose to see them through, despite the current low level of finished portals.

"I would be hard pushed not to find a company that doesn’t care about that," says Gartner's Drakos.