Magic Quadrant for
Horizontal Portal Products, 2006

The portal product market has reached a new stage of development, with larger independent software vendors increasing their share of the market at the expense of smaller vendors. Market consolidation continues, and the remaining vendors continue to augment their products' functionality.

WHAT YOU NEED TO KNOW

Vendor consolidation in the horizontal portal space continues as the market enters a new phase of its evolution. This stage of the consolidation is not limited to vender merger and acquisition activity, although two acquisitions affected the portal market in 2005. Some vendors have re-examined their commitment to the horizontal portal market and re-focused their energies elsewhere. Although vendor consolidation continues, a new wave of vendors may enter the market from related technology spaces.

Vendors approach the horizontal portal market from many backgrounds, including application servers, content management tools and business applications. Selecting a horizontal portal product requires careful vendor evaluation to make appropriate trade-offs among functional capabilities, architectural fit and strategic direction. Use Gartner's Magic Quadrant in combination with other tools, including analyst consultation, when selecting a horizontal portal.

STRATEGIC PLANNING ASSUMPTION(S)

One to three vendors will enter the horizontal portal space from related technology markets (for example, BPM) by the end of 2007 (0.6 probability).

Through 2008, less than 10 percent of Global 1000 companies will deploy open-source portals at the enterprise level because of lack of compelling advantages in cost, support, functionality and finish (0.8 probability).

MAGIC QUADRANT

The horizontal portal product market has experienced significant changes since the publication of the last Magic Quadrant, but the 2006 Magic Quadrant also shows the continuation of several trends that manifested last year. The 2006 Magic Quadrant (see Figure 1) has 14 vendors, down from 19 in 2005. Some vendors shifted their focus elsewhere and have left the market. Others were niched too narrowly to be considered or failed to meet the minimum criteria for inclusion.

Figure 1. Magic Quadrant for Horizontal Portal Products, 2006

Source: Gartner (May 2006)

Market Overview

Demand for horizontal portal products remains strong, driving most enterprise portal deployments. Horizontal portal products can be packaged in suites – for example, in application platform suites (APSs) or smart enterprise suites (SESs) – or they can be acquired as stand-alone products. A combination of suite and stand-alone product acquisitions fueled the horizontal portal product market to more than $780 million in 2005.

Vendor Consolidation Continues

BEA Systems' acquisition of the last significant pure-play vendor, Plumtree Software, in the second half of 2005 should be considered the start of a new stage in the horizontal portal market's evolution. The large independent software vendors (ISVs) in the horizontal portal product market continued to take market share from midsize and smaller players in 2005. This trend in movement toward large ISVs will continue to take share from midsize and small vendors, forcing them to pursue a niche strategy or to seek acquisition.

Although the 2006 Magic Quadrant has one-fourth less vendors than the 2005 Magic Quadrant, the portal product market grew by more than 9 percent in the same time frame. Two vendors profiled in the 2005 Magic Quadrant were acquired by other vendors with portal products. The future of the acquired products differs greatly. 2006 marks the effective departure of two large ISVs from the portal market. Neither Novell nor Sybase actively sell their portal products to new customers for horizontal deployments at this point.

Although Gartner expects vendor consolidation in this space to continue, a counter-trend may temporarily slow the overall decline in the number of vendors in this market. New players from spaces such as business process management (BPM) and business intelligence (BI), and vendors positioning themselves as service-oriented architecture (SOA) framework providers, could introduce a new wave of competition that might slow the pace of market share consolidation. One to three vendors will enter the horizontal portal space from related technology markets (for example, BPM) by the end of 2007 (0.6 probability). After some time, however, most of these new entrants will likely depart the market in a similar exodus to those opportunistic entrants that exited the market between late 2002 and 2004.

Although adoption of open-source software (OSS) portals is low among Global 1000 companies, OSS portals may provide another source of new vendors. Through 2008, less than 10 percent of Global 1000 companies will deploy open-source portals at the enterprise level because of lack of compelling advantages in cost, support, functionality and finish (0.8 probability). However, Gartner does not expect this trend to continue indefinitely. The technology in Java-based horizontal OSS portals, such as that provided by JBoss (recently acquired by Red Hat), is maturing, and vendor-independent portal standards, such as JSR 168, are reducing concerns about vendor lock-in. Additionally, some large ISVs have continued to exploit OSS technology in their portals, highlighted by Sun Microsystems' new strategy of open sourcing its entire infrastructure stack, including its portal. Open-source portal solutions could pose a threat to large ISVs' traditional license sales. At the same time, open source provides large ISVs with opportunities to generate revenue from services supporting open-source initiatives.

Market Definition/Description

Gartner defines a portal as a "Web software infrastructure that provides access to, and interaction with, relevant information assets (for example, information/content, applications and business processes), knowledge assets and human assets by select targeted audiences, delivered in a highly personalized manner." Enterprise portals may face different audiences, including:

• Employees – business-to-employee (B2E)
• Customers – business-to-consumer (B2C)
• Business partners – business-to-business (B2B)

• Vertical portals focus on accessing specific applications or business functions.
• Horizontal portals seek to integrate and aggregate information from multiple cross-enterprise applications, as well as specific line-of-business tools and applications.

Inclusion and Exclusion Criteria

Vendors had to meet four minimum criteria to be considered for the 2006 Horizontal Portal Product Magic Quadrant:

• The vendor must have at least $5 million in annual portal-related product and service revenue during the 2005 calendar year.
• The vendor must provide sales and support for the portal product in at least two of the following five geographic regions: North America; Latin America; Europe, the Middle East and Africa; Japan; and the Asia/Pacific region.
• The vendor must have the ability to sell an enterprise portal for deployment in a variety of scenarios, including B2E, B2B and B2C.
• The vendor must provide portal functionality that meets all Generation 1 criteria, as defined in previously published Gartner materials.

No new vendors were added to the 2006 Magic Quadrant. As in previous years, several vendors and open-source alternatives failed to meet one or more of the market inclusion criteria. Examples include, but are not limited to, abaXX Technology, Hitachi, JBoss, NEC and uPortal.

Dropped

Five vendors included in the 2005 Magic Quadrant for horizontal portal products were excluded from this year's analysis. Vendors were dropped from the analysis if they no longer met the inclusion criteria, shifted out of the horizontal portal market or were acquired.

• Sun acquired SeeBeyond 25 August 2005.
• BEA acquired Plumtree 20 October 2005.
• Open Text has shifted its focus so that its portal is used only as an interface for its own document, content management and collaboration technologies.
• Sybase is merging its Enterprise Portal with its Unwired Accelerator product. Enterprise Portal had been experiencing a significant lack of traction for the past three years. Sybase has focused its portal strategy to provide portal functionality for mobile technologies in pursuit of the mobile access gateway market and is no longer actively selling its horizontal portal product to new customers.
• Novell has been removed from the 2006 Magic Quadrant because of the company's shift from delivering horizontal portals to delivering an identity management solution that leverages elements of its portal functionality.

Evaluation Criteria Definitions Ability to Execute Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements, etc. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision. Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the Web site, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals. Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.

Evaluation Criteria

Ability to Execute

Gartner evaluates horizontal portal vendors' ability to execute based on seven high-level criteria.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria	Weighting
Product/Service	high
Overall Viability (Business Unit, Financial, Strategy, Organization)	high
Sales Execution/Pricing	standard
Market Responsiveness and Track Record	high
Marketing Execution	standard
Customer Experience	standard
Operations	standard

Source: Gartner

Completeness of Vision

The following eight criteria were used to measure and compare horizontal portal vendors' completeness of vision.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria	Weighting
Market Understanding	standard
Marketing Strategy	standard
Sales Strategy	standard
Offering (Product) Strategy	high
Business Model	standard
Vertical/Industry Strategy	high
Innovation	high
Geographic Strategy	standard

Source: Gartner

Leaders

As a result of acquisition activity, there are only seven leaders in the 2006 Magic Quadrant. No new vendors are classified as leaders in the Magic Quadrant, although the relative positioning of 2005 leaders shifted. The leaders share several characteristics. Each vendor articulates a high-level strategy targeted at enterprise clients. These strategies provide a long-range vision for customers and help to focus their efforts. Whether the strategy is BEA's ThinkLiquid, SAP's Enterprise Services Architecture or that of another comparative vendor, the portal plays a significant role. Each of the leading portal vendors pursues several other strategic markets and is active in at least two of the following areas: APSs, SESs, enterprise content management or business applications. Some vendors view the opportunities for cross-selling across these markets as critical to their success. Others view the portal as a means of improving their positions in one or more of their historic markets. Fourth-generation and fifth-generation features are prominent strengths for most of the leaders. Each leader has experienced significant traction in the portal space.

Challengers

The single challenger in the 2006 Magic Quadrant demonstrates strong overall viability and solid product functionality, but it has not demonstrated vision regarding product strategy or innovation in terms of new portal functionality. One challenger from 2005 is re-focusing its efforts away from the portal market.

Visionaries

The single visionary in the 2006 Magic Quadrant demonstrates relatively strong innovations in new portal functionality and some areas of product strategy, but it has not demonstrated levels of marketing and sales execution comparable to the leaders in this space. One visionary from the 2005 Magic Quadrant moved into the Niche Players quadrant.

Niche Players

Three of last year's niche players were removed from this year's analysis, but one of 2005's visionaries is now classified as a niche player. The niche players in the 2006 Magic Quadrant have limited product functionality, relatively weak overall viability, a lack of sufficient vision for the horizontal portal space in terms of product or market strategy, or a mix of these characteristics. In some of these cases, the vendor offers what would otherwise be considered attractive technology, but its market presence or financial viability means it will only play a limited role in this market. In other cases, the vendor may be pursuing a strategy focusing on one form of portal access or on portals serving one type of audience. Finally, the vendor may be positioning its portal solely as the interface for its own applications or it may be selling its portal only to its established customer base for its other applications or infrastructure components.

Vendor Comments

BEA Systems
BEA's acquisition of Plumtree and its subsequent market execution have improved its competitive positioning in the horizontal portal market beyond simply augmenting market share. Positioning Plumtree technologies as part of its AquaLogic family enhances the credibility of BEA's messaging around AquaLogic as the platform-neutral portal alternative. BEA plans to leverage much of the excellent product functionality offered by the Plumtree suite of products, including portal, content, collaboration, analytics, process and development capabilities for use in WebLogic portal deployments. Plumtree was one of the few vendors to offer native Java and native .NET versions of a portal product, and this platform strength was one of the key motivators behind BEA's acquisition of the company. The Plumtree portal technology will provide user integration and interaction services to the new BEA AquaLogic product line, focusing not on the Java-centric developer required by BEA's WebLogic portal, but rather on corporate developers and business analysts. Plumtree had a relationship with Fuego, so BEA's acquisition of the BPM player leveraged integration with the portal product. BEA's WebLogic portal also improved during the year. BEA faces the difficult task of integrating two portal product lines while keeping both customer bases happy. WebLogic portal customers and acquired Plumtree customers will eventually have to migrate to a converged portal engine. BEA will have to make this migration as painless as possible.

BroadVision
BroadVision continues to offer a horizontal portal product and demonstrates strong functionality in some areas, especially those related to consumer-facing portal deployments. However, the company continues to struggle financially (including a terminated acquisition during 2005), and its viability is its biggest hurdle to new sales.

CA
CA is focused primarily on leveraging its portal as an embedded asset to its BPM and enterprise management solutions. It continues to offer the portal as a stand-alone horizontal product that is often leveraged to deliver BI dashboards.

Day Software
Day Software focuses on enterprise content management. The company does not aggressively market its portal capabilities, and its visibility in the portal product market is limited.

Fujitsu
Fujitsu has been challenged in its efforts to expand its customer base significantly outside Japan for its Interstage portal. Although it continues its efforts to sell Interstage in other geographic areas, Fujitsu has not experienced notable traction with the product outside Japan.

Hummingbird
Hummingbird markets its Enterprise WebTop as a Web-based interface for its technology components and as a horizontal portal framework. Hummingbird has not seen significant traction for its portal outside its customer base in the content management market or in legal and government vertical markets.

IBM
IBM WebSphere Portal is an industry-leading portal product, and the company continues to expand its lead in market share. The portal pulls technology from across the breadth of IBM, including the WebSphere, Tivoli, Lotus and DB2 divisions. This strength has also been a historical weakness, because these varied components require some effort to integrate. IBM has improved this situation, but deployment of WebSphere Portal is still not a turn-key operation. The addition of IBM Workplace, a set of technologies closely aligned with the Lotus division, solidifies the company's content and collaboration strategies. WebSphere Portal now plays a linchpin role in IBM's Workplace strategy. IBM continues to offer one of the most complete portal solutions on the market.

Microsoft
Microsoft saw significant acceleration of the use of SharePoint Portal Server (SPS) 2003 during the past year. The overwhelming popularity of Windows SharePoint Services was one draw to SPS, as was its inclusion in enterprise agreements, but the strength of SPS in Microsoft-centric organizations, its ease of deployment and its aggressive price point also contributed to the product's increased traction. SPS is mostly deployed at the departmental level of large enterprises, and Microsoft has only a few customers with deployed portals for more than 100,000 users, and none for more than 200,000 users. However, Microsoft is strengthening the position of SPS in the Microsoft Office System with the advent of Office 2007, which is slated for delivery by YE06.

Oracle
Oracle Portal remains a leader in this space and has enjoyed wide deployment in the market. Oracle continues to make progress in enhancing product features, albeit at a slightly slower pace than some of the other leaders. Oracle has highlighted the role of the portal in its Fusion Middleware strategy, but it has been slow to position the portal in sales situations as the leading edge of its effort to integrate the diverse business applications of its acquired installed bases. Once a leader in portal and portlet development features, Oracle fell behind its key competitors in this area; however, with its OmniPortlet capabilities, it has closed that gap. Oracle provides collaborative features with Oracle Collaboration Suite, and content features with Oracle Content Server. Oracle is positioning the portal as a key component of its strategy to provide an SOA.

SAP
SAP continues to focus on the NetWeaver stack and its Enterprise Service Architecture, instead of the component level of a portal product. SAP Portal continues to see deployment in organizations with SAP applications, but it enjoys no deployment outside its application customers. SAP Portal continues to advance but not at the pace of many leading competitors. For example, support for JSR 168 and Web Services for Remote Portlets won't be introduced until later in 2006, while all the other leading portal product vendors have supported these standards for at least a year (for some, more than two years). However, SAP Portal will continue to play a pivotal role in NetWeaver and SAP's strategies.

Sun Microsystems
In the early days of the portal market, Sun was one of the strongest players, with a well-deserved reputation for a scalable, secure package that gained a visible portion of a highly fragmented market. In recent years, Sun has experienced a slowdown in market momentum and a significant loss of visibility, not only with its portal product but also with its other software offerings. However, during the past year, Sun has undertaken some dramatic moves to reverse this turn of events in its products, technology, company management and business model. Sun Java System Portal Server 7 is now OSS, along with the rest of Sun's middleware stack (for example, application server and directory). The SeeBeyond acquisition will augment integration and compositing functionality. Sun also has added some leading-edge features to its portal, such as wikis, blogging, really simple syndication and Ajax-based user interfaces. These forward-looking moves are necessary and appropriate if Sun is to improve its position in the Leader's quadrant, which faded in past years but now indicates stronger vision-related attributes. The shift to open source is a gamble that may pay off in coming years, assuming Sun executes well in other areas, but there is also an element of risk in that strategy.

Tibco Software
Tibco Software's PortalBuilder has traditionally been sold in conjunction with Tibco's integration technology. Tibco is striving to expand its portal beyond a traditional integration platform. In addition to adding robust Generation 4 and Generation 5 features, Tibco has a solid SOA strategy and will expand its visibility in this market. Tibco is also attempting to leverage its support of Ajax as a competitive differentiator. These capabilities were gained through the acquisition of General Interface, one of the early and leading Ajax vendors. Tibco's content and collaboration features are comparatively weak, although efforts were made to address some of the product's gaps in PortalBuilder Five. Tibco is positioning its portal and related technologies as a direct competitor to larger vendors' SOA frameworks.

Acronym Key and Glossary Terms APS – application platform suite B2B – business-to-business B2C – business-to-consumer B2E – business-to-employee BI – business intelligence BPM – business process management ISV – independent software vendor OSS – open-source software SES – smart enterprise suite SOA – service-oriented architecture SPS – SharePoint Portal Server

Vignette
From a technical perspective, Vignette continues to provide one of the best portals in the market. Vignette's financial health has been improving. In addition to a portal, Vignette also is strong in terms of enterprise content management, and there is a significant opportunity for cross-selling. Vignette's overall success depends on exploiting these opportunities. The company's primary challenge is its relative size compared with other vendors in the Leader's quadrant, and the full assimilation of several new senior executives. Vignette is the only vendor in the Leader's quadrant not attempting to offer a full technology stack.

webMethods
webMethods has improved its portal's functionality during the past year, but the product still lags behind products from leaders in the market. Its portal product is almost always positioned as part of webMethods' Access and Fabric messages and sold to webMethods integration customers or prospects, along with other webMethods technologies.

Gartner RAS Core Research Note G00139926, David Gootzit, Gene Phifer, Ray Valdes, 16 May 2006

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